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 8/28/07 For Aug 2007 | ||||||||||||
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Highlights
Consumer confidence fell back to an expected 105.0 in the Conference Board's index for August, down from a cyclical high of 111.9 in July. The decline was roughly evenly split between the leading component of expectations, 88.2 vs. 94.4, and the present situation, 130.3 vs. 138.3. Twelve-month inflation expectations were stable at 5.1 percent. Buying plans for cars fell back though buying plans for homes ticked higher.
Labor readings dipped to reverse the prior month's improvement. Those saying jobs are plentiful fell to 27.5 percent vs. 30.3 percent while those saying they are hard to get rose 1 full percentage point to 19.7 percent. The changes are not dramatic but are certain to confirm early expectations for softer payroll growth in August.
Treasury prices eased and stocks firmed in reaction to the data as some in the market were looking for a greater drop given this month's market turmoil. The Conference Board's data remain on healthy ground pointing to steady levels of consumer spending and steady rates of economic growth. The Reuters/University of Michigan final tally for August consumer sentiment will be released Friday.
The Conference Board's consumer confidence index surprisingly jumped to 112.6 in July from 105.3 in June. Strength was centered in job readings. Another positive in the report was the 12-month inflation outlook, easing 3 tenths to 5.1 percent. Buying plans also improved with more saying they will buy a car over the next six months, 7.2 percent vs. 6.0 percent, and even more saying they will buy a house, 3.1 percent vs. 2.9 percent. However, since the last report, consumer will have seen much more on subprime problems and a lower stock market. On the other hand, labor conditions remain tight and the price of gasoline has come down somewhat.
Consumer confidence Consensus Forecast for August 07: 105.0
Range: 99.0 to 107.6
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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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