The Conference Board Consumer Confidence Index™, which had retreated in June, declined further in July. The Index now stands at 46.6 (1985=100), down from 49.3 in June. The Present Situation Index decreased to 23.4 from 25.0 last month. The Expectations Index declined to 62.0 from 65.5 in June.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months. The decline in the Present Situation Index was caused primarily by a worsening job market, as the percent of consumers claiming jobs are hard to get rose sharply. The decline in the Expectations Index was more the result of an increase in the proportion of consumers expecting no change in business and labor market conditions, as opposed to an increase in the percent of consumers expecting conditions to deteriorate further. However, more consumers are pessimistic about their income expectations, which does not bode well for spending in the months ahead."
These set of figures was one of the first economic indicators that caught my eye roughly two months ago. The trends then were positive. Now they are negative. Here are the charts from pollster.com:
As the Conference Board indicates, this comes down to the job market. While the initial unemployment claims data is positive, the public needs to see an improvement in the establishment survey now. That means the next employment report is that much more crucial.
2 comments:
Actually, I have a suggestion for you on that chart. Take the same chart and do two things:
1) Turn off Internet polling which tend to be less reliable
2) Turn on the option for "Staying the Same"
The result of it is that you see the "getting worse bump a bit, and the getting "getting better" bump down a bit, but you see a huge increase in "staying the same".
Seems to me that in a recession of this magnitude, in terms of consumer confidence, "staying the same", may be as good as "getting better". If people feel like we've reached a point of some stability, they can start thinking about taking more risks with their money, etc.
Also, if you turn up the sensitivity to the max, what's interesting is that there's clearly a change happening in the last couple of weeks. Getting Worse is going down, and both getting better and staying the same are up sharply.
Ahhhh statistics :)
"The trends then were positive." So will you now admit that you were wrong in calling the turn? Of course not, because you have been harvesting other green shoots.
The balance between negative and positive indicators overwhelmingly favors the pessimistic view, making Bonddad what is called an outlier.
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