June Consumer Confidence falls sharply
In contrast to the bounce seen in both the ABC and UoM polls, the Conference Board Confidence # for June was a big miss as it fell about 10 pts to 52.9 vs the estimate of 62.5 and is at a 3 mo low. The Present Situation fell 4.3 pts while Expectations dropped by 13.4 pts. Those that said jobs were Plentiful fell by .3 pts while those that said jobs were Hard To Get rose by almost 1 pt but both remain well off their worst readings in ’09. Those that said Business Conditions are Good and those that expect them to get Better fell to the lowest since Feb. Those that plan to buy a car within 6 mo’s fell from 6 to 3.7 to the lowest on record dating back to ’67 and those that plan to buy a home fell to 1.9 from 2.1, just shy of the lowest since ’82. Those that plan to take a vacation fell to less than 1 pt off its lowest level since at least ’78. One yr inflation expectations fell .1% to 5.2%, a touch above the 10 yr avg.
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June 29th, 2010 at 11:44 am
Thanks for the summary! Those are very negative numbers.
June 29th, 2010 at 1:00 pm
The Conference Board number was an outlier in Feb, and it seems to be out of sync with all the other sentiment polls too (you left Gallup off the list, but they also reported economic confidence at record highs). When 5 polls point to north, and 1 poll points to south, I’m less inclined to lend credence to the outlier.
June 29th, 2010 at 2:38 pm
I live in one of the more affluent areas of the country (Santa Barbara, CA) and see a fairly decent cross section of people in my practice, but I haven’t talked to anybody who feels positive about anything economically-speaking, especially the wealthy.
June 29th, 2010 at 9:08 pm
Consumer confidence does not provide a reliable ability to predict future economic growth etc.
http://poq.oxfordjournals.org/cgi/content/abstract/46/3/361
http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/conf.htm
“… not correlate strongly with consumer spending and thus has little predictive value…”
http://www.thefreelibrary.com/Can+consumer+confidence+forecast+household+spending%3F+Evidence+from…-a0141908108
http://www.loanspeed.com/?p=595
http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V8H-458WPPJ-4&_user=10&_coverDate=06/30/1986&_rdoc=1&_fmt=high&_orig=search&_sort=d&_docanchor=&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=fe2746621964d59dcfcfaf17753d39a8
Examples include:
1) High consumer confidence numbers in the late 90′s through 2000 prior to the first Bush recession
2) High consumer confidence numbers and in 2006-7 prior to second Bush recession.
3) Low consumer confidence during the Bush recession prior to the 4% GDP growth of the Obama administration, so far.
4) Low consumer confidence numbers prior to the Clinton boom years.
5) While this last survey was taken, growth was shown to be 2.7%