Tuesday, November 30, 2010

USA Monthly Consumer Confidence Index at 5-Month High (Chart) "Suggests the economy is still expanding, albeit slowly"


USA Economy: "Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season"

USA Monthly Consumer Confidence at 5-Month High in November

Official Statement "The Conference Board Consumer Confidence Index®, which had improved in October, increased further in November. The Index now stands at 54.1 (1985=100), up from 49.9 in October. The Present Situation Index rose to 24.0 from 23.5. The Expectations Index increased to 74.2 from 67.5 last month. Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season. Consumers’ assessment of the current state of the economy and job market, while only slightly better than last month, suggests the economy is still expanding, albeit slowly. Expectations, the main driver of this month’s increase in confidence, are now at the highest level since May (Exp. Index, 84.6). Hopefully, the improvement in consumers’ mood will continue in the months ahead.”

Cycle History The current Consumer Confidence Index (CCI) in November of 54.1 (preliminary) is down -57.8 and -52% from the cyclical peak 111.9 in July 2007. The current CCI is up +28.8 and +114% from the cyclical bottom of 25.3 in February 2009. Therefore, the CCI continues much closer to the cyclical low than to the high.

Trend The current trend is now upwards. The November CCI of 54.1 (preliminary) is now above the 12-month moving average of 53.4, after being below the prior 5 consecutive  months. The  current CCI is above the 24-month moving average of 48.7 and has been for 9 consecutive months. The current CCI is now above the 36-month moving average of 53.2, after being below the prior 5 consecutive months. (The 12-month, 24-month, and 36-month moving averages charts are not shown on this page).

Monthly Consumer Confidence Index (Chart) Below is a chart of the past 41 months of The Conference Board CCI from the July 2007 cyclical high of 111.9 through the latest month reported, November 2010 54.1 (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 54.1 (preliminary) has now increased for 2 months to stay above the recent lows of 48.6 in September 2010 and 46.4 in February 2010.

Commentary The November Consumer Confidence Index of  54.1 has now risen above the recent lows of 48.6 in September 2010 and 46.4 in February 2010.  As with other November data and the Thomson Reuters/University of Michigan's November reading on consumer sentiment at a 5-month high also, this upwards bounce was expected.  The CCI continues 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. However, this is positive news and the December CCI should increase also.

The Conference Board TCB
*Data courtesy of The Conference Board*

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