Recent Updates

  • Philippines: GDP Summary (Q4)
  • Japan: Wage Indexes, Monthly Labor Survey (Nov)
  • New Zealand: Accomodation Survey (Nov)
  • Canada: Wholesale Trade (Nov)
  • US: National Financial Conditions Index (Dec)
  • Ireland: WPI (Dec)
  • Spain: Cement Statistics (Jun), Industry Turnover Indexes, New Orders, Services Sector Activity Index (Nov), Government
  • more updates...

Economy in Brief

U.S. Consumer Confidence Fell Back To A Historic Low
by Tom Moeller December 30, 2008

Worry about jobs, income and the future shape of business conditions weighed heavily on consumer psychology. For December, the Conference Board indicated that consumer confidence fell and washed away a slight improvement in November. The 15.0% month-to-month decline in confidence was to an index level of 38.0 which was the lowest in the series' history which extends back to 1967. The decline disappointed Consensus expectations for a modest improvement in the December index to 45.5.

During the last ten years there has been a 82% correlation between the level of consumer confidence and the y/y change in real consumer spending.

A decline in consumers' reading of current economic conditions was responsible for most of the decline in overall confidence this month. The index measure fell by nearly one-third from the November level and the latest reading was down by three-quarters from last December's figure.

The index of consumers' expectations fell a slight 5.2% month-to-month and it has been relatively stable this year near a historically low level.

Only 7.7% of respondents thought that business conditions were good and 46.0% thought they were bad, up from 16.2% during all of last year. A gloomy reading of the current job market was notably evident as 42.0% thought that jobs were hard to get, double last year's percentage and up five percentage points just since last month.

Moving somewhat counter to the increase in gloom about the short-term economy was that 2.5% of respondents planned to buy a home during the next six months, up from 2.1% in November. The reading was, however, still near the series' historic low. Also showing slight m/m improvement were plans to buy an appliance or an automobile, but both measures also still were near their all time lows.

Expectations for the inflation rate in twelve months fell further 5.8%, the lowest level since February.  

The Conference Board figures referenced above are available in Haver's CBDB database. 

Conference Board  (SA, 1985=100) December November Y/Y % 2008 2007 2006
Consumer Confidence Index 38.0 44.7 -58.1 57.9 103.4 105.9
  Present Situation 29.4 42.3 -74.0 69.8 128.8 130.2
  Expectations 43.8 46.2 -42.2 49.9 86.4 89.7
close
large image