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Economy in Brief

Consumer Confidence Rose Further
by Tom Moeller July 27, 2004

The Conference Board’s July Index of Consumer Confidence rose 3.2% to 106.1 following an upwardly revised 10.4% gain in June. Consensus expectations had been for a decline to 102.0.

During the last ten years there has been a 55% correlation between consumer confidence and the y/y change in non-farm payrolls.

The index of consumer expectations jumped 5.0% (+22.6% y/y) after an upwardly revised 6.3% June gain. The present situation index added 0.6% (+69.0% y/y) to the 17.0% surge in June.

Jobs were viewed as hard to get by just 26.0% of respondents, the lowest level since September 2002. More jobs were expected in six months by 19.4% of respondents versus 16.4% last year and 18.3% in 2002.

During the last ten years there has been a 65% correlation between the level of consumer confidence and the y/y change in real PCE.

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

Conference Board July June Y/Y 2003 2002 2001
Consumer Confidence 106.1 102.8 37.8% 79.8 96.6 106.6
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