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 12/27/07 For Dec 2007 | ||||||||||||
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Highlights
Current job data in the Conference Board's consumer confidence report sank, headlining December's report and hinting at softer readings in next week's monthly employment report. Those saying jobs are currently hard to get jumped more than 2 points to 23.5 percent vs. November's 21.4 percent. Adding to the signal was a dip in those that say jobs are currently plentiful, down 6 tenths to 22.7 percent.
A feature of December's report is a separation between expectations for current conditions and expectations for future conditions. The current job readings are negative but future job readings improved, with more seeing more jobs ahead, 11.2 percent vs. 10.6 percent, and fewer seeing fewer jobs ahead, 19.9 percent vs. 22.8 percent. Strength in the report's headline index of 88.6, up from 87.8 in November, reflects strength in the outlook. The expectations component rose nearly 6 points to 75.5 to offset a decline in the present situation, down more than 7 points to 108.3. Expectations make up 60 percent of the headline index and strength in this area points to rising readings ahead.
But a big weakness in the report are current business conditions where more say conditions are bad, at 20.0 percent, than those that say conditions are good, at 20.3 percent. Optimists are still ahead on this score but only barely. A tilt lower here in January's report would feed talk of recession. Inflation indications were tame with the 12-month outlook down 1 tenth to 5.6 percent.
The Conference Board's consumer confidence index 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. The Fed will be watching upcoming confidence reports not just for whether the consumer has the confidence to keep spending the economy away from recession but also to see if inflation expectations are becoming unanchored. In the November report, 12-month inflation expectations jumped six-tenths to 5.7 percent.
Consumer confidence Consensus Forecast for December 07: 86.5
Range: 85.0 to 89.0
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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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