Tuesday, April 27, 2010

A Long Way To Go

The Lehmann Letter (SM)

Today the Conference Board released its April consumer confidence figure:


At 57.9 consumer confidence is now higher than it has been for a year and a half and twice as high as it was during the depths of recession.

Lynn Franco, Director of The Conference Board Consumer Research Center said, "Consumer confidence, which had rebounded in March, gained further ground in April. The Index is now at its highest reading in about a year and a half (Sept. 2008, 61.4). Consumers’ concerns about current business and labor market conditions eased again. And, their outlook regarding business conditions and the labor market was also more positive than last month. Looking ahead, continued job growth will be key in sustaining positive momentum."

Let's put the latest number in perspective by using it to update the chart below.

Consumer Confidence

(Click on chart to enlarge.)

Recessions shaded

Even when consumer confidence reaches 60 it will be no higher than the trough into which it fell during most recessions. The latest reading of 57.9 is a big improvement over recent depths, but it also illustrates how far we must go before we return to a happy number.

This dichotomy is typical of many recent data releases. They have two faces. We should be aware of the frown as well as the smile.

(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.)

© 2010 Michael B. Lehmann

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