Global| Apr 28 2009U.S. Consumer Confidence Jumps Sharply With Improved Expectations
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers seem to be getting into a better mood which may translate into more spending. The April index of consumer confidence, reported by the Conference Board, improved sharply. Rising to its highest level since November, the [...]
Consumers seem to be getting into a better mood which may
translate into more spending. The April index of consumer confidence,
reported by the Conference Board, improved sharply. Rising to its
highest level since November, the reading of 39.2 was up by more than
half from the February low. Lest there's too much excitement, however,
the level of confidence remained down by more than half from 2007
average. The latest figure was quite a bit firmer than Consensus
expectations for a reading of 29.0.
The Conference Board data can be found in Haver's CBDB database.
During the last ten years there has been an 86% correlation between the level of consumer confidence and the y/y change in real consumer spending.
Consumers' improved expectations drove the rise in confidence
this month with a 63.9% rise from the March level. The percentage of
respondents expecting business conditions to improve rose sharply to
15.6%, the highest level since 2007, but a reduced 25.3% still expected
them to worsen. That improvement was expected by 13.9% of respondents
to generate more jobs, double the recent low.
The present conditions index rose just modestly and remained near its recent low. It remained off by more than three-quarters from a year earlier. Jobs were seen as hard to get by 47.9% of respondents, near the highest since 1992, and jobs were seen as plentiful by only 4.5%. Business conditions were seen as good by just 7.6% and that was near the 1991 low. Those who thought conditions were bad fell slightly to 45.7%, still near the highest since 1983.
Expectations for the inflation rate in twelve months have been roughly stable since November at 5.9%. That's down from last year's high of 7.7%. Expectations about interest rates has started to increase with 38.8% of respondents expecting higher rates while 23.5% expect rates to fall. A greatly lessened 36.4% of respondents expected lower stock prices.
Are Fiscal Stimulus Funds Going to the "Right" States? from the Federal Reserve Bank of San Francisco is available here.
| Conference Board (SA, 1985=100) | April | March | Y/Y % | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Consumer Confidence Index | 39.2 | 26.9 | -37.6 | 57.9 | 103.4 | 105.9 |
| Present Situation | 23.7 | 21.9 | -71.1 | 69.9 | 128.8 | 130.2 |
| Expectations | 49.5 | 30.2 | -1.0 | 50.0 | 86.4 | 89.7 |
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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