Global| Nov 24 2009U.S. Consumer Confidence Gains M/M
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers were distressed this past winter. Malaise is the best word to describe consumer confidence since then. The Conference Board indicated that consumer confidence during November rose just 1.6% from October following sharp [...]
Consumers
were distressed this past winter. Malaise is the best word to describe
consumer confidence since then. The Conference Board indicated that
consumer confidence during November rose just 1.6% from October
following sharp declines during the prior five months. Though the level
of confidence is up sharply from this winter's low, it has moved
sideways since the spring. The Conference Board data can be found in
Haver's CBDB database.
During the last ten years there has been an 86% correlation between the level of consumer confidence and the y/y change in real consumer spending.
Consumers' assessment of the current economic conditions slipped this month and was near the historic low. It remained off by almost two-thirds from one-year earlier. Jobs were seen as hard to get by 49.8% of respondents and jobs were seen as plentiful by only 3.2% which was near the series' historic low. Business conditions were seen as good by just 8.1% and that also was near the series' low. Consumers who thought business conditions were bad rose slightly to 45.7%. While off somewhat from its high, the reading was still nearly the highest since 1983.
The expectations component of confidence recovered a piece of its large
October decline and the index remained near the highest level since
late-2007. Fewer expected business conditions & employment to
improve but a large deterioration from here also was not expected.
Expectations for the inflation rate in twelve months held stable at
5.3%, the lowest level since 2007 and down from last year's high of
7.7%. Interest rates in twelve months were expected to be higher by
51.3% of respondents, while a reduced 12.9% expected rates to fall. A
greatly increased 36.3% of respondents expected stock prices to rise.
Consumers continued to manage their spending plans cautiously. A reduced 2.0% plan to buy a home during the next six months while just 23.2% plan to buy a major appliance. That's versus 30.9% back in 2007. Only 4.4% plan to buy an automobile versus 6.0% in 2007. Just 2.1% plan to buy a new one.
b>Housing's Great Fall: Putting Household Balance Sheets Back Together Again from the Federal Reserve Bank of St. Louis is available here.
| Conference Board (SA, 1985=100) | November | October | September | Y/Y % | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 49.5 | 48.7 | 53.4 | 10.7 | 57.9 | 103.4 | 105.9 |
| Present Situation | 21.0 | 21.1 | 23.0 | -50.4 | 69.9 | 128.8 | 130.2 |
| Expectations | 68.5 | 67.0 | 73.7 | 48.3 | 50.0 | 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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