Global| Jun 29 2010U.S. Consumer Confidence Declines
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board indicated that consumer confidence wavered this month. Their consumer confidence index fell 15.6% m/m to 52.9 and gave up the prior two months' increase. Nevertheless, confidence remained improved from last year. [...]
The Conference Board indicated that consumer confidence wavered this month.
Their consumer confidence index fell 15.6% m/m to 52.9 and gave up the prior two
months' increase. Nevertheless, confidence remained improved from last year.
Consensus expectations had been for a relatively unchanged June reading of 62.9.
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 Conference
Board data can be found in Haver's CBDB database.
The expectations component of confidence fell 15.8% m/m but remained more-than-double the recession low. Consumers expect the inflation rate in twelve months to be 5.2%, about as they have for 12 months, down from the 2008 high of 7.7%. Interest rates in twelve months were expected to be higher by a lessened 49.6% of respondents and an increased 15.0% expected rates to fall. A greatly lessened 25.8% of respondents expected stock prices to rise and an increased 36.0% expected prices to fall.
Consumers' assessment of the present situation dropped 14.4% m/m and the level was near last year's average. Jobs were seen as hard to get by a slightly increased 44.8% of respondents but jobs were seen as plentiful by only 4.3%. That was up just slightly from the series' historic low of 3.1% reached in November. A diminished 8.0% of respondents saw business conditions as good while 42.4% saw them as bad.
Just 1.9% of those surveyed plan to buy a home during the next six months. Also down m/m to 22.9% were those who plan to buy a major appliance, versus 30.9% who planned to buy one back in 2007. A new low of 3.7% plan to buy an automobile and just 1.2% plan to buy a new one, also a new low.
The Folly of Currency Pegs from the American Enterprise Institute is available here.
| Conference Board (SA, 1985=100) | June | May | April | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 52.9 | 62.7 | 57.7 | 7.3% | 45.2 | 57.9 | 103.4 |
| Present Situation | 25.5 | 29.8 | 28.2 | 2.0 | 24.0 | 69.9 | 128.8 |
| Expectations | 71.2 | 84.6 | 77.4 | 8.7 | 59.3 | 50.0 | 86.4 |
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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