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 4/29/08 For Apr 2008 | ||||||||||||
| ||||||||||||
Highlights
The Conference Board issued today one of its most alarming reports on consumer confidence in 40 years of data, results certain to push stocks, the dollar and Treasury yields lower. The results will also complicate debate at the ongoing FOMC meeting, making it harder for policy makers to assure the nation that the economy will soon improve and that inflation pressures will cool.
The Conference Board's index fell nearly 4 points in April to 62.3 -- the worst reading since the early 90s. The present situation component, which makes up 40 percent of the headline index, fell more than 10 points to 80.7 for its worst reading since 2003 when the unemployment rate had peaked at 6.3 percent. The present situation index matches closely with the unemployment rate and today's reading points to an alarming shift higher in next week's employment report. The report's component for current job conditions also points to trouble next week, as more say jobs are hard to get (27.9 percent April vs. 24.5 percent March) and fewer say jobs are plentiful (16.6 percent vs. 19.2 percent). The jobs question for six months shows an incredibly low 8 percent seeing more jobs against an incredibly high 32.8 percent seeing fewer jobs.
But the worst news in the report is a true spike in inflation expectations, up 7 tenths in the month alone to 6.8 percent -- a record level matched only after Hurricane Katrina in 2005. CPI data may not being showing much pressure but consumers are saying clearly that inflation is on the rise. The results even include a 30-year low for vacation plans, no doubt reflecting the weak dollar, which raises the cost of foreign travel, and high gas prices which of course raise the cost domestic travel. Also, some consumers may be looking for work and can't spend the money or time on travel. Buying plans for homes fell 1 full point to 2.4 percent for the latest bad news on the housing sector.
The Conference Board's consumer confidence index in March further plunged while at the same time inflation expectations spiked - the worst results this report can signal. Consumer confidence fell to 64.5 in March from February's 76.4 reading. Both March and February were the lowest readings since the beginning of the expansion in 2003. The worst news in the report may have been a spike in inflation expectations as 1-year inflation expectations surged 7 tenths to 6.1 percent.
Consumer confidence Consensus Forecast for April 08: 62.0
Range: 58.0 to 65.0
![[Chart]](chart.gif)
|
Typically retail sales will move in tandem with consumer optimism - although not necessarily each and every month. |
| 2008 Release Schedule | ||||||||||||||||||||||||||
|
powered by
![[Econoday]](../../../../../../../../../images/logo.gif){kind=logo}