U.S. Consumer Confidence: Sharp Improvement but Still Lacking

The Conference Board consumer confidence measure rose sharply to 72.2 in Oct from 68.4 in Sept. it was last higher in Feb 2008.

The present situation is better in Oct too, rising to 56.2 from 48.7 it was last higher in Sept 2008.

Expectations rose to 82.9 in Oct from 81.5 in Sept. they were last stronger ion Feb 2012

The readings by component are now more up to a more normal zone in terms of the levels of the readings compared to having been so pathetic for most of the "recovery". For the most part they still weak but in a disaster zone anymore. The question is now is can it last: and can it continue to improve?

Questions remain: What about the storm's impact? The fiscal cliff? Europe? The election?

Confidence stands in the 27th percentile of its queue (ordered ranking of results from weakest to strongest) since 1980. The present situation is at the 28th percentile of its queue; expectations are in the 27th percentile. This means that these readings are weaker only 27% or 28% of the time. That implies that they are stronger 73% o72% of the time and that is still bad news, but it used to be worse.

Current business conditions stand in the 50th percentile of their queue. The "Jobs plentiful" reading stands in the 43rd percentile reading. "Jobs not so plentiful" is in the 48th percentile a near-neutral reading for that mildly negative response (50 is neutral). However, for the most negative question "are jobs hard to get?" the standing is in the 75th percentile and is well above the neutral level of 50. This reading is weaker than this 75% of the time; but being lower on this measure is good news because this is a negative attribute. So the 75% figure is actually quite bad.

MOST DISCOURAGING...is that the "jobs hard to get reading" which is a raw 39.4 reading is only marginally below its average of 44.4 since November 2008. Its historic median is 29.6 and it is well above that! This metric has averaged a reading of 40.1 since Feb of 2012 In October is has only improved to 39.4..Moreover, in the last 47 months it has been lower than its current value only TWICE before. So the 39.4 reading is as about as good as it has gotten in the recovery but that is very slim progress. The message on this metric is that the jobs market is in bad straits and has not been improving much at all in the last 11months

The outlook readings for expectations are generally a bit more lofty: for business expectations the queue standing is at the 62nd percentile a historically firm position in its queue. For employment it is in the 78th percentile a strong signal of expected improvement. For income, the reading is on the negative side at 44.9% it is still below neutral. That makes this reading still very bad and unresponsive to improving economic conditions at least a perceived by job market participants.

Responses to questions on plans to buy are still quite weak. Responses on plans to buy a car or a new car are around the 20th percentile of their historic queue- weaker only 20% of the time. Plans to buy major appliances are weaker only about 9% of the time.

Consumer Comfort... much better for this year but overall not so good. The weekly consumer comfort reading fell to -34.7 this week from -34.6 last week a still very strong level for this reading which leaves the headline in the top 12% of its queue over the past 52 weeks...but still in the bottom 30% of its queue since 1986.

On balance we see improvement in consumer confidence. But the U of M and the Conference Board indices show this same sort of rise. They also jibe with the weekly consumer comfort measure. All of this is reassuring, but the pace of improvement is still slow and the future is still clouded.

Consumer Confidence and Regional Readings Levels of Index Numbers Avg Lvl All Oct 12 Sep 12 Aug 12 Jul 12 Jun 12 May 12 6-mo Confidence Index 72.2 68.4 61.3 65.4 62.7 64.4 65.7  Present Situation 56.2 48.7 46.5 45.9 46.6 44.9 48.1  Expectations 82.9 81.5 71.1 78.4 73.4 77.3 77.4 Regions New England 76.8 65.3 52.7 53.7 58.8 56.2 61.5  Current Conditions 46.4 35.3 32.8 35.4 22.5 40.4 34.5 MidAtlantic 73.1 59.3 59.6 66.2 52.6 52.7 62.2  Current Conditions 50.1 36.8 43.9 43.5 42.6 36.3 43.4 East North Central 65.6 70.9 55.2 53 63.9 53.5 61.7  Current Conditions 45.7 46.3 35.6 33.5 44.1 28.9 41.0 West North Central 94.9 91.7 77.4 74.6 80 80.6 83.7  Current Conditions 89.9 97.2 67.6 71.4 71.6 68.9 79.5 South Atlantic 77.3 66.6 67.9 65.3 64.2 66.6 68.3  Current Conditions 59 46.8 52.2 37.2 43.9 47 47.8 East South Central 54 52.8 57 45.5 59.2 59.2 53.7  Current Conditions 41.5 30.1 41.4 33.1 41.8 51.2 37.6 West South Central 85.5 79.9 76.3 93.2 96.4 88.3 86.3  Current Conditions 91.9 79 72.5 102.6 103 83.7 89.8 Mountain 77.2 87.7 66.3 66.9 52.7 55.5 70.2  Current Conditions 56.6 65.5 53.3 38 37.9 38.3 50.3 Pacific 72.9 78.8 70.1 64.7 49.6 68.9 67.2  Current Conditions 51.8 44.9 43.8 52.7 25.7 37.5 43.8