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 1/29/08 For Jan 2008 | ||||||||||||
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Highlights
Consumer confidence fell back in January but the results are offset by a less pessimistic view of the jobs market. The Conference Board's index slipped to 87.9 vs. an upward revised 90.6 in December. The key component is jobs hard to get, at 20.1 percent for a 1.6 percentage point month-to-month decline. Prior gains in this reading signaled December's dramatic 3 tenth jump in the unemployment rate to 5.0 percent and today's reading signals a slip back in January. Also positive were those who are optimistic on the labor market saying jobs are plentiful, at 23.9 percent for a 3 tenth gain.
But outside of current jobs, the readings in the report are mostly negative including greater pessimism in current and future business conditions and greater pessimism in future job and income readings. Buying plans for houses remain very weak though buying plans for vehicles and appliances improved.
Today's results won't upset the financial markets and confirm the dip in jobless claims that together are pointing to improvement in January job data. The housing market may be in a free fall and fuel prices may be a burden, but consumer spirits will hold up as long as the labor market remains healthy.
The Conference Board's consumer confidence index dipped to 87.3 in November from October's already soft 95.2. According to the Conference Board's monthly report, the decline was due to high gas prices and home-heating bills. While the slippage in confidence is a concern to the Fed in terms of whether the economy is headed for recession, this report also should worry the Fed about inflation trends. Inflation expectations for 12 months out jumped six tenths to 5.7 percent, no doubt reflecting higher gasoline and heating oil prices.
Consumer confidence Consensus Forecast for December 07: 87.5
Range: 80.0 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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