Tuesday, September 28, 2010

USA Monthly Consumer Confidence Index at 7 Month Low (Chart) "Confidence in state of economy remains quite grim"

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USA Economy: "Overall, consumers’ confidence in the state of the economy remains quite grim"


USA Monthly Consumer Confidence Index at 7 Month Low

Official Statement "The Conference Board Consumer Confidence Index®, which had improved in August, retreated in September. The Index now stands at 48.5 (1985=100), down from 53.2 in August. The Present Situation Index decreased to 23.1 from 24.9. The Expectations Index declined to 65.4 from 72.0 last month. Says Lynn Franco, Director of The Conference Board Consumer Research Center: 'September’s pull-back in confidence was due to less favorable business and labor market conditions, coupled with a more pessimistic short-term outlook. Overall, consumers’ confidence in the state of the economy remains quite grim. And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months.'”

Cycle History The current Consumer Confidence Index (CCI) in September of 48.5 (preliminary) is down -63.4 and -56.7% from the cyclical peak 111.9 in July 2007. The current CCI is up +23.2 and 91.7% from the cyclical bottom of 25.3 in February 2009. Therefore, the CCI is much closer to the cyclical low than to the high.

Trend The current trend has been  downwards. The September CCI of 48.5 (preliminary) is below the 12-month moving average of 53.0 and has been for 3 consecutive  months. The September CCI of 48.5 is above the 24-month moving average of 47.8 and below the 36-month moving average of 55.4.

Chart (Monthly Consumer Confidence Index) Below is a chart of the latest 69 months of The Conference Board CCI from January 2005 through the latest month reported, September 2010 (preliminary). As can be seen, the CCI bottomed in February 2009 and the Great Recession officially ended in June 2009. After a peak in May 2009 of 54.8, the CCI has been in a range from a low of 46.4 in February 2010 to a high of 62.7 in May 2010. The current CCI of 48.5 is very close to the recent low of 46.4 in February 2010.


Commentary The September Consumer Confidence Index of  48.5 is very close to the recent low of 46.4 in February 2010 and is described as "grim" by Lynn Franco, Director of The Conference Board Consumer Research Center. The CCI is closer to the cyclical low of 25.3 in February 2009 than the cyclical high of 111.9 in July 2007, as evidenced by the above chart. This coincides with the Thomson Reuters/University of Michigan's preliminary September reading of 66.6 which was a 13-month low.


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*Data courtesy of The Conference Board*


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