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 9/25/07 For Sep 2007 | ||||||||||||
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Highlights
Consumer confidence tumbled in September, down to a lower-than-expected reading of 99.8 vs. 105.6 in July. Confidence in the present situation fell to 121.7 from 130.1. The index for the present situation typically hinges on the jobs market, views on which darkened in the month with more seeing jobs hard to get, 22.1 percent vs. August's 19.7 percent, and fewer seeing jobs as plentiful, 25.7 percent vs. 27.5 percent. These results are likely to weigh on expectations for September's payroll data and also the unemployment rate.
The outlook isn't much better than the current assessment, with the expectations index down to 85.2 vs. 89.2. More see fewer jobs ahead, 18.7 percent vs. 15.2 percent, and more see business conditions worsening, 11.8 percent vs. 10.2 percent.
Among other readings, inflation expectations are stable despite high gas prices, at 5.0 percent 12 months out vs. August's 5.1 percent. Fewer said they expect to buy a house in the next six months, at 2.7 percent vs. 3.6 percent in August. Fewer also expect to buy a vehicle, at 5.2 percent vs. 6.3 percent.
This was a pretty dismal report and does suggest that August's turmoil in the financial markets finally began to hurt confidence by September. The dollar slipped and Treasury prices firmed in reaction to the data, which are likely to weigh on the stock market through the session.
The Conference Board's consumer confidence index fell back to 105.0 in 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. Given the split nature of the economy in September - continuing credit crunch worries early in the month and post-Fed rate cuts later in the month - it is going to be hard to make much sense out of the September report.
Consumer confidence Consensus Forecast for September 07: 104.0
Range: 100.0 to 105.5
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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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