Global| Jan 31 2006Consumer Confidence Up: Jobs Plentiful, Inflation Stable
by:Tom Moeller
|in:Economy in Brief
Summary
The Index of Consumer Confidence, as measured by the Conference Board, rose 2.4% to 106.3 during January. This third consecutive monthly increase exceeded Consensus expectations for a lesser gain to 105.0. The increase was in line [...]
The Index of Consumer Confidence, as measured by the Conference Board, rose 2.4% to 106.3 during January. This third consecutive monthly increase exceeded Consensus expectations for a lesser gain to 105.0. The increase was in line with the 2.1% m/m (-2.2% y/y) rise in Consumer Sentiment reported last week by the University of Michigan.
During the last twenty years there has been a 52% correlation between the level of consumer confidence and the y/y change in real consumer spending. The correlation rose to 66% during the last ten years.
Consumers' assessment of the present situation added 6.4% (14.5% y/y) to a revised 6.6% December increase. Jobs were viewed as plentiful by 26.9% of respondents, a sharp increase from December and the highest since September, 2001. Fewer (20.3%) thought jobs were hard to get, also the lowest since 2001.
The index of consumers' expectations dipped slightly month to month (-8.9% y/y). Fewer expected better business conditions in six months and fewer expected that there would be more jobs.
Inflation in twelve months was expected at a 5.1% rate, down slightly from the 5.2% expected in December and down sharply from the 6.8% expected last September.
The Conference Board’s survey isconducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.
| Conference Board | Jan | Dec | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Consumer Confidence | 106.3 | 103.8 | 1.1% | 100.3 | 96.1 | 79.8 |
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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