Global| May 27 2008Consumer Confidence in May Fell Unexpectedly Hard
by:Tom Moeller
|in:Economy in Brief
Summary
For May, the Conference Board reported that consumer confidence fell by 8.9% m/m which was roughly double the decline registered in April. The decline also doubled the consensus expectation for a 4.5% drop. The May shortfall left [...]
For May, the Conference Board reported that consumer confidence fell by 8.9% m/m which was roughly double the decline registered in April. The decline also doubled the consensus expectation for a 4.5% drop.
The May shortfall left confidence at its lowest level since late 1992.
The present conditions index led the May decline with a 9.2%
m/m drop to the lowest level since late 2003. By region the index is
off notably in the Pacific (-52.2% y/y), mid-Atlantic (-54.2% y/y), the
South Atlantic (-49.0% y/y), and in the New England (-43.7% y/y) states.
Just 13.1% of respondents saw business conditions as good, the lowest since early 1992. Jobs as plentiful were seen by a much lessened 16.3% while 28.0% saw jobs as hard to get, the highest since late 2004.
The expectations component of the index fell 8.6% to its lowest level since the mid-1970s. The percentage of respondents expecting business conditions to worsen in six months rose to 33.6% and the percentage looking for income to decline rose to 14.9%.
Expectations for the inflation rate again rose, last month to 7.7%. That was the highest level in the series' 20 year history.
Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending in Real Time? is a 2006 article from the Federal Reserve Bank of Philadelphia. It answers "no" and it is available here.
| Conference Board (SA, 1985=100) | May | April | Y/Y % | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Consumer Confidence Index | 57.2 | 62.8 | -47.3 | 103.4 | 105.9 | 100.3 |
| Present Situation | 74.4 | 81.9 | -45.3 | 128.8 | 130.2 | 116.1 |
| Expectations | 45.7 | 50.0 | -49.3 | 86.4 | 89.7 | 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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