The Conference Board compiles a survey of consumer attitudes on present economic conditions and expectations of future conditions. Five thousand consumers across the country are surveyed each month. While the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month. Why Investors Care
| Released on 11/25/08 For Nov 2008 | ||||||||||||
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Highlights
In what can be seen as good news, the consumer's assessment of the economic outlook is moving up from the bottom though the assessment of current conditions continues to edge lower. The mix makes for a sizable jump in the Conference Board's consumer confidence index, to 44.9 in November vs. October's 38.8 (38.0 first reported). The expectations index, the report's main component that makes up 60 percent of the headline index, rose more than 10 points to 46.7. The gain reflects improvement across future sub-components including jobs where more see more jobs ahead and fewer respondents see fewer jobs ahead.
But for the current assessment, the reverse is true, a fact that will deepen concern over the November employment report. Those seeing more jobs currently available fell while those seeing fewer rose. The present situation index, a component making up the other 40 percent of the headline index, fell 1.3 points to 42.2. This index, in past recessions over the past 40 years, has been lower, down into the 20s.
Buying plans pose some of the worst news in the report, showing serious declines for cars, houses and appliances. Good news included a 5 tenths fall in 12-month inflation expectations to 5.9 percent. Markets didn't show much reaction to the report which offers an interesting but still sobering mix of indications.
The Conference Board's consumer confidence index in October plunged to a record low, falling more than 20 points to 38.0 and the lowest reading in more than 40 years of data. Looking ahead, there certainly are more reasons to expect another anemic figure for November than for significant improvement. While gasoline prices have been halved in recent weeks and this should bump up confidence, other events have been overwhelmingly negative. Unemployment has spiked, consumers are having a hard time getting credit, retirement savings have been decimated by stock losses, and consumers likely see financial reform more as a circus or free-for-all than as reason for hope. GM's publicized woes are not helping either.
Consumer confidence Consensus Forecast for November 08: 38.0
Range: 30.0 to 45.0
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Typically retail sales will move in tandem with consumer optimism - although not necessarily each and every month. |
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