Tuesday, January 27, 2009

Consumer Confidence

The Lehmann Letter ©

Today the Conference Board released its consumer-confidence survey
(http://www.conference-board.org/economics/ConsumerConfidence.cfm ).

The Board said:

“The Conference Board Consumer Confidence Index™, which had decreased in December, inched lower in January and continues to be at a historic low. The Index now stands at 37.7 (1985=100), down from 38.6 in December….”

The index has hovered at or below 40 since the fall. The following chart shows that these are unprecedented readings. It also makes clear that January’s number is no fluke. We’re stuck in a rut.

Consumer Confidence

(Click on chart to enlarge)

Recessions shaded

We probably won’t escape from that rut any time soon. Rising unemployment and the news of mass layoffs have more than offset falling inflation and gasoline prices. As long as the news remains grim, consumers will continue to feel grim. That, of course, will depress household expenditures and exacerbate the recession.

There’s no solace in these data.

(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2009 Michael B. Lehmann

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