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Economy in Brief

U.S. Consumer Confidence Recovers
by Tom Moeller  April 26, 2011

After the shock from last month's spike in gasoline prices, consumers gathered their senses. For April, the Conference Board reported that its index of consumer confidence rose to 65.4, up 2.5% from March following that month's little-revised 11.4% plunge. The latest figure contrasted with Consensus expectations for a reading of 64.8. During the last ten years there has been a 77% correlation between the level of confidence and the 12-month change in real personal consumption expenditures.

The present situations component of the consumer confidence index rose another 5.6% m/m. Jobs were seen as hard to get by a lessened 41.8% of respondents, the least since January, 2009. Business Conditions were seen as good by a roughly stable 14.8% of respondents.

The expectations component of confidence recovered a modest 1.6% m/m, following the 16.6% March decline to the lowest level since November. Expectations for business conditions and employment in six months deteriorated further but income expectations improved slightly. Consumers expected the inflation rate in twelve months to be a slightly lessened 6.3%. Interest rates in twelve months were expected to be higher by an increased 56.5% of respondents while just 13.5% expected rates to fall. An increased 32.6% of respondents expected stock prices to rise but that still was down from 37.9% in January.

The Conference Board data can be found in Haver's CBDB database. The expectation figure is the AS1REPNA database.

Conference Board (SA, 1985=100) Apr Mar Feb Y/Y % 2010 2009 2008
Consumer Confidence Index 65.4 63.8 72.0 13.3 54.5 45.2 57.9
 Present Situation 39.6 37.5 33.8 40.4 25.7 24.0 69.9
 Expectations 82.6 81.3 97.5 6.7 73.7 59.3 50.0
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