Global| Jun 30 2004Interconnected Global Labor Trends Impact Consumer Confidence
Summary
Consumer confidence improved somewhat in Europe in June, as shown in the monthly Euro-Zone survey. The move is not substantial, just reversing May's 2-point deterioration, but it brought the Indicator back to -14, its lowest since [...]
Consumer confidence improved somewhat in Europe in June, as shown in the monthly Euro-Zone survey. The move is not substantial, just reversing May's 2-point deterioration, but it brought the Indicator back to -14, its lowest since November 2002. This move was driven by 2-point improvements in the components for "General Economic Situation" over both the last 12 months and the next 12 months and in the item, "Unemployment Expectations over the next 12 months".
This last item is particularly noteworthy for its close correlation with a similar series in the US consumer confidence data. As colleague Tom Moeller pointed out yesterday, a major factor in the jump in the Conference Board's confidence index for June was the decline in "jobs hard to get" to its lowest reading since September 2002.
It would be no surprise that within the European survey, unemployment expectations have a 99% correlation with overall confidence. But it is remarkable that overall consumer confidence in Europe has a 79% correlation with "jobs hard to get" in the US survey. The two total confidence series have an 87% correlation, as suggested in the accompanying graph, and the two employment series, 81%. World markets are intertwined, and the various regions' populations appear to view those market developments with so much the same perspective that it can be affirmed in simple statistical analysis.
| June 2004 | May 2004 | Apr 2004 | June 2003 | 2003 | 2002 | 2001 | |
|---|---|---|---|---|---|---|---|
| Euro-Zone 12 Consumer Confidence Indicator, % Balance | -14 | -16 | -14 | -19 | -18 | -11 | -5 |
| Unemployment Expectations Next 12 Months, % Balance | 31 | 33 | 31 | 40 | 38 | 26 | 14 |
| US Conference Board Consumer Confidence, Index, 1985 =100 | 101.9 | 93.1 | 93.0 | 83.5 | 79.8 | 96.6 | 106.6 |
| Jobs Hard to Get, % Replying | 26.5 | 30.3 | 28.0 | 31.9 | 31.8 | 24.3 | 16.2 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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