Global| Jun 30 2009U.S. Consumer Confidence Slips
by:Tom Moeller
|in:Economy in Brief
Summary
According to the Conference Board, consumer confidence slipped this month following gains during the prior three months. The slip did not, however, alter the picture of improvement in consumer attitudes. Confidence remained up by more [...]
According to the Conference Board, consumer confidence slipped this month following gains during the prior three months. The slip did not, however, alter the picture of improvement in consumer attitudes. Confidence remained up by more than one-half from the February low and roughly equal to the year ago level. 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.
The expectations component of confidence slipped the most last month with an 8.4% decline following three strong monthly increases. Still, the index remained near the highest level since late 2007. The percentage of respondents expecting business conditions to improve slipped to 21.2% but that remained near the highest level since 2004. A much reduced 20.2% expected conditions to worsen. That improvement was expected by 17.4 of respondents to generate more jobs, more than double the percentage at the recent low.
Consumers' assessment of the current economic conditions also
slipped m/m and remained near its recent low. It remained off by nearly
two-thirds from a year earlier. Jobs were seen as hard to get by a
still-high 44.8% of respondents and jobs were seen as plentiful by only
4.5% of respondents. Business conditions were seen as good by just 8.0%
and that was near the 1991 low. Consumers who thought business
conditions were bad rose slightly to 45.6%, still near the highest
since 1983.
Expectations for the inflation rate in twelve months have been roughly stable at 5.9%. That's down from last year's high of 7.7%. Expectations about interest rates have increased sharply with 51.7% of respondents expecting higher rates while 16.3% expect rates to fall. A greatly increased 31.5% of respondents expected stock prices to rise.
| Conference Board (SA, 1985=100) | June | May | Y/Y % | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Consumer Confidence Index | 49.3 | 54.8 | -3.3 | 57.9 | 103.4 | 105.9 |
| Present Situation | 24.8 | 29.7 | -62.1 | 69.9 | 128.8 | 130.2 |
| Expectations | 65.5 | 71.5 | 58.2 | 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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