The preliminary UoM confidence figure in Aug at 73.6 was above expectations of 72.2 and compares with 72.3 in July, 73.2 in June and 79.3 in May. Interestingly, the Current Conditions component rose almost 5 pts to the highest level since Jan ’08. The Outlook though fell 1.1 pts to the lowest level of the year. Also of note, one year inflation expectations jumped to 3.6% from 3.0% in July and its the highest since March when gasoline prices were nearing $4.00 per gallon on average. AAA last night said the average gallon was at $3.72, up from $3.40 over the past month. Bottom line, while consumer confidence is not a leading indicator and thus tells us nothing about what the economy will do going forward we watch it anyway to get a snapshot of public opinion and inflation expectations. To put into historical perspective, today’s confidence reading of 73.6 compares with the 10 yr average of 79.2, 20 yr average of 87.5 and 30 yr average of 87.8.
