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 7/29/08 For Jul 2008 | ||||||||||||
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Highlights
The Conference Board's consumer confidence data did not show the snap-back evident in last week's Reuters/University of Michigan report, suggesting instead that pessimism continues to run very deep. The overall index did rise 9 tenths to 51.9 compared to an upward revised 51.0 in June (50.4 originally reported). But the level is still among the very lowest in more than 40 years of data.
Job sentiment, in contrast to the Reuters/University of Michigan report, is a key feature of the Conference Board's data, and results for July point to a seventh month of payroll contraction in Friday's employment report. Those saying jobs are currently hard to get continues to climb, to 30.3 percent for a 6 tenth gain in the month. Those saying jobs are plentiful continues to fall, down 6 tenths to 13.5 percent. The assessment of the future jobs market also shows erosion with the spread between optimists and pessimists widening to 28.9 from 27.7 percentage points. Pessimists, for a third month, outnumber optimists in income expectations -- one of the most unusual signs in the history of the report.
Buying plans remain depressed but perhaps less severely than in June as 2.7 percent expect to buy a house in the next six months, up from 2.4 percent in June and 2.1 percent in May. The results suggest that falling home prices, down more 16 percent based on this morning's Case-Shiller report, may be attracting buyer interest. But interest in major appliances continues to decline, falling another 6 tenths to 27.7 percent. Buying plans for vehicles fell 1 tenth to a very weak 5.0 percent.
Inflation expectations remain severely elevated but did dip back 1 tenth to 7.6 percent. Declining oil prices and the prospect of declining gas prices point to further declines through year end. The markets seemed to welcome the report as good news with stocks and the dollar extending gains. Yet the results at best point to no more than stabilization at very weak levels for the consumer sector.
The Conference Board's consumer confidence index is near historical lows after a nearly 8 point plunge in June to 50.4. The expectations component actually did set a record low of 41.0 in June, after falling more than 7 points. The present situation index came in at 64.5, down nearly 10 points from its worst reading since the early part of the ongoing expansion in 2003. Inflation expectations were severely elevated in June but unchanged from May at 7.7 percent for one year out.
Consumer confidence Consensus Forecast for July 08: 50.0
Range: 48.0 to 52.0
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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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