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
Confidence Index - Level Actual
Consumer confidence is down to its lowest level since Hurricane Katrina
and before that to the beginning of the 2001 expansion. The Conference
Board's consumer confidence index fell to 95.6 in October vs.
September's 99.5. The index hit as high as 111.9 in July, a cyclical
peak and just before the credit squeeze of August.
the report's details, declines in the present situation index eased as
the index slipped about 2 points to 118.8. This index fell 9 points in
September signaling a tick higher in the month's unemployment rate to
4.7 percent. Job readings for the present situation were soft. The
spread between those saying jobs are plentiful and hard to get narrowed
from 3.2 points to 1.5 points (24.1 percent vs. 22.6 percent). This
spread was as high as 11.3 in July. The current weakness points to
limited strength in the nation's labor market.
inflation expectations rose a tenth to 5.1 percent, a reading that
won't please Federal Reserve officials who meet today. But softening
consumer spirits are consistent with a recent run of soft economic data
that likely assure a rate cut for tomorrow's FOMC statement. Treasury
prices firmed slightly and the dollar eased slightly in immediate
reaction to the data.
Market Consensus Before Announcement
Conference Board's consumer confidence index tumbled in September to
99.8 from 105.6 in August. Confidence in the present situation fell to
121.7 from 130.1 while the expectations index declined to 85.2 from
89.2 in August. Surprisingly, inflation expectations were stable.
Consumer confidence Consensus Forecast for October 07: 99.0
Range: 97.0 to 100.5
Typically retail sales will move in tandem with consumer optimism -
although not necessarily each and every month.
Data Source: Haver Analytics