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Economy in Brief

U.S. Consumer Confidence Rebounds
by Tom Moeller November 29, 2011

Following three months of weakness, the Conference Board's November Index of Consumer Confidence rebounded by roughly one-third versus October. A lesser rise to 43.0 had been expected. Nevertheless, confidence remained down nearly one-quarter versus its February peak.  During the last ten years there has been 47% correlation between the level of confidence and the three-month change in real personal consumption expenditures.

This month, it was consumer's reading of the present economic situation that showed the largest rebound. The index's 41.3% m/m jump was to its highest level since May. An improved 13.3% saw economic conditions as good and a lessened 38.2% felt they were bad. Jobs were seen as hard to get by a lessened 42.1% of respondents.

The expectations component of confidence also rose a sharp 35.6% this month to its highest since July. Nevertheless, the index level was off 30.5% versus its February peak. An improved 13.6% of respondents thought that business conditions would improve and a lessened 15.8% thought they would worsen. Just 12.9% thought employment would improve versus nearly one-quarter who thought it would worsen. A higher 14.9% felt their income would rise but that still was the least since July.

Expectations for inflation in twelve months fell to 5.5% versus the peak of 6.7% in March. A lessened 43.0% thought interest rates would rise, the least since September of last year. A higher percentage, 24.9%, thought stock prices would rise and a lessened 43.3% expected a decline.

The Conference Board data can be found in Haver's CBDB database. The expectation figure is the AS1REPNA database.

Do We Know What We Owe? A Comparison of Borrower- and Lender-Reported Consumer Debt from the Federal Reserve Bank of New York can be found here.

Conference Board (SA, 1985=100) Nov Oct Sep Y/Y % 2010 2009 2008
Consumer Confidence Index 56.0 40.9 46.4 -3.1 54.5 45.2 57.9
 Present Situation 38.3 27.1 33.3 55.1 25.7 24.0 69.9
 Expectations 67.9 50.0 55.1 -15.1 73.7 59.3 50.0
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