Tuesday, December 28, 2010

USA Monthly Consumer Confidence Index Dips in December (Chart) *Modest decline, consumers remain tepid*


The Conference Board: Monthly Consumer Confidence Index

USA Monthly Consumer Confidence Index Dips in December

Official Statement by The Conference Board The Conference Board Consumer Confidence Index®, which had improved in November, decreased slightly in December. The Index now stands at 52.5 (1985=100), down from 54.3 in November. The Present Situation Index declined to 23.5 from 25.4. The Expectations Index decreased to 71.9 from 73.6 last month. Says Lynn Franco, Director of the Consumer Research Center at The Conference Board: "Despite this month's modest decline, consumer confidence is no worse off today than it was a year ago. Consumers' assessment of the current state of the economy and labor market remains tepid, and their outlook remains cautious. Thus, all signs continue to suggest that the economic expansion will continue well into 2011, but that the pace of growth will remain moderate."

Cycle History The current Consumer Confidence Index (CCI) in December of 52.5 (preliminary) is down -59.4 and -53% from the cyclical peak of 111.9 in July 2007. The current CCI is up +27.2 and +108% 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 flat. The December CCI of 52.5 (preliminary) is now below the level 12-month moving average of 53.3, after being above in November and being below the prior 5 consecutive  months. The  current CCI is above the slightly ascending 24-month moving average of 49.3 and has been for 10 consecutive months. The current CCI continues above the 36-month moving average of 52.2 for the 2nd consecutive month, 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 42 months of The Conference Board CCI (preliminary) from the July 2007 cyclical high of 111.9 through the latest month reported, December 2010. As can be seen, the CCI bottomed in February 2009 and the Great Recession officially ended in June 2009. After a peak in May 2010 of 62.7, the CCI has been in a range from a low of 48.6 in September 2010 to a high of 54.3 in November 2010. The current CCI of 52.5 (preliminary) continues above the recent lows of 48.6 in September 2010 and 46.4 in February 2010.

Commentary The decline of the December Consumer Confidence Index to 52.5 (preliminary) is disappointing and unexpected. However, the CCI continues above the recent lows of 48.6 in September 2010 and 46.4 in February 2010.  In contrast, Thomson Reuters/University of Michigan's December reading on consumer sentiment is at a 6-month high [USA Consumer Sentiment at 6-Month High (Chart) *2 consecutive strong monthly increases*]. Therefore, the overall downturn in the Consumer Confidence Index does not appear to be strong or a change in trend. 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.

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*Data courtesy of The Conference Board*

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