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 11/27/07 For Nov 2007 | ||||||||||||
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Highlights
Consumer confidence sank in November due to high gas and home-heating bills, according to the Conference Board's monthly report that showed a headline dip to 87.3 in November from October's already soft 95.2. Perhaps the biggest headline is a giant 6 tenth jump in 12-month inflation expectations to 5.7 percent. High gas prices may now be affecting consumer psychology in what is no doubt a major concern for Federal Reserve policy makers.
Those saying that jobs are plentiful still outnumber those that say they are jobs are hard to get, though by a slim margin of 23.2 percent vs. 21.3 percent. Buying plans for major appliances popped back in the month though buying plans for autos dipped and for homes dipped further.
Rates of consumer confidence are soft but not alarming, unlike today's inflation expectation reading. There was no initial reaction to the results though they do cloud the economic outlook a bit. Next reading on inflation expectations will be from the Reuters/University of Michigan consumer sentiment report on Friday, Dec. 7.
The Conference Board's consumer confidence index fell to 95.6 in October from 99.5 in September. Consumer confidence is down to its lowest level since Hurricane Katrina and before that to the beginning of the 2001 expansion. While confidence in the economy is slipping, fears of higher inflation are rising. Twelve-month inflation expectations rose a tenth to 5.1 percent. One of the key concerns of the Fed is that inflation expectations should not be allowed to rise, otherwise reducing inflation is more difficult.
Consumer confidence Consensus Forecast for November 07: 90.5
Range: 88.8 to 92.5
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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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