Global| Jan 27 2009Consumer Confidence Fell To A Record Low
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board reported that its December index of consumer confidence fell to a record low last month. The drop to a level of 38.0 followed a November uptick and it lowered Confidence by more than one-half from its year ago [...]
The Conference Board reported that its December index of consumer confidence fell to a record low last month. The drop to a level of 38.0 followed a November uptick and it lowered Confidence by more than one-half from its year ago level. The December decline about matched Consensus expectations.
During the last ten years there has been an 82% correlation between the level of consumer confidence and the y/y change in real consumer spending.
The present conditions index fell by nearly one-third from the
November level, off by three-quarters during the year. Jobs were seen
as hard to get by 42.0% of respondents, the highest since 1992 and jobs
were seen as plentiful by only 6.2%. Business conditions were seen as
good by just 7.7%, the lowest since 1991. Those who thought conditions
were bad rose to 46.0%, also the highest since 1992.
And the economic outlook was dire as indicated by another decline in the expectations index. The percentage of respondents expecting business conditions to worsen in six months rose to 32.8%, near the highest since the credit crunch of 1980. A modest 12.4% expected improvement in conditions. More jobs were expected by just 9.9% of respondents while a near-record 19.1% foresaw less income.
Expectations for the inflation rate in twelve months fell further 5.8%, the lowest level since February.
The decline in confidence around the country was fairly uniform and varied little by income level.
The Economic Outlook and Some Challenges Facing the Federal Reserve is a speech made by Philadelphia Fed President Charles I. Plosser and it can be found here.
| 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 | 69.4 | 128.8 | 130.2 |
| Expectations | 43.8 | 46.2 | -42.2 | 49.9 | 86.4 | 89.7 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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