Global| Aug 31 2010U.S. Consumer Confidence Improves Slightly This Month But Remains Off From Recent High
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board indicated that consumer confidence rebounded moderately this month following two months of sharp decline. Their consumer confidence index rose 4.9% m/m to 53.5 following a 6.1% July decline that was less than [...]
The Conference Board indicated that consumer confidence rebounded moderately this
month following two months of sharp decline. Their consumer confidence index
rose 4.9% m/m to 53.5
following a 6.1% July decline that was less than reported initially.
Nevertheless, the August level remained down 14.7% from the May high. Consensus expectations had been for an
unchanged reading m/m. 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 August improvement was due to a rebound in consumer expectations. The expectations component of confidence rose 7.4% m/m and recovered all of its July decline. The index remained more-than-double the recession low. Consumers expect the inflation rate in twelve months to be 4.9%, a material decline from recent months' expectations and down from the 2008 high of 7.7%. Interest rates in twelve months were expected to be higher by a lessened 43.6% of respondents, down from the April high of 56.1%, and an increased 15.8% expected rates to fall. A greatly lessened 26.3% of respondents expected stock prices to rise and 32.8% expected prices to fall.
Finally, consumers' assessment of the present situation remained depressed and fell a sharp 5.7% this month after a 1.5% July drop. There's been an increased sense of poor business conditions. Jobs were seen as hard to get by an increased 45.7% of respondents and jobs were seen as plentiful by a lessened 3.8%, still near the series' historic low of 3.1% reached in November. A slightly improved 8.7% of respondents saw business conditions as good while 41.9% saw them as bad.
Just 2.0% of those surveyed plan to buy a home during the next six months while a lessened 25.1% plan to buy a major appliance, down from the 30.9% who planned to buy one back in 2007. A slightly improved 5.0% plan to buy an automobile but just 1.9% plan to buy a new one.
Slowing Pace of Growth from the Federal Reserve Bank of Dallas can be found here.
| Conference Board (SA, 1985=100) | August | July | June | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 53.5 | 51.0 | 54.3 | -1.8% | 45.2 | 57.9 | 103.4 |
| Present Situation | 24.9 | 26.4 | 26.8 | -2.0 | 24.0 | 69.9 | 128.8 |
| Expectations | 72.5 | 67.5 | 72.7 | -1.8 | 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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