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Economy in Brief

Consumer Confidence Down Sharply
by Tom Moeller February 24, 2004

The Conference Board’s Index of Consumer Confidence for February slumped 9.4% versus January to 87.3. Confidence in January was revised down.

The drop in Confidence was much greater than Consensus expectations for a slight decline to 93.0. It roughly matched the 10.3% decline in the preliminary February reading of Consumer Sentiment from the University of Michigan.

During the last ten years there has been a 67% correlation between the level of consumer confidence and the y/y % change in real PCE.

The reading of the present situation fell 7.9% to 73.1 (+15.1% y/y). The index of consumer expectations fell 10.2% m/m to 96.8 (47.3% y/y).

Jobs were viewed as hard to get by 32.1% of respondents. That was versus 31.9% in 2003 and 24.3% in 2002. The low for this series was in 2000 when 11.2% of respondents viewed jobs as hard to get.

Expectations for business conditions in six months fell sharply with only 21.8% expecting conditions to improve, the lowest since September.

The Conference Board’s survey isconducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

Conference Board Feb Jan Y/Y 2003 2002 2001
Consumer Confidence 87.3 96.8 34.7% 79.6 96.6 106.6
Chain Store Sales Held the High Ground
by Tom Moeller February 24, 2004

Chain store sales slipped 0.2% last week following jumps during the prior two weeks of 1.4% and 1.8%, according to the ICSC-UBS survey.

Sales so far during February are up 1.9% versus the average January level.

During the last ten years there has been a 59% correlation between the year-to-year percent change in the ICSC-UBS measure of chain store sales and the change in non-auto retail sales less gasoline.

The ICSC-UBS retail chain-store sales index is constructed using the same-store sales reported by 78 stores of seven retailers: Dayton Hudson, Federated, Kmart, May, J.C. Penney, Sears and Wal-Mart.

ICSC-UBS (SA, 1977=100) 02/21/04 02/14/04 Y/Y 2003 2002 2001
Total Weekly Retail Chain Store Sales 437.9 438.9 8.1% 2.9% 3.6% 2.1%
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