Tuesday, February 28, 2012

Consumer Confidence Climbing

The Lehmann Letter (SM)

More good news: This morning The Conference Board, a New York business organization, announced that its index of consumer confidence had improved to 70.8 in February from 61.5 in January:


Lynn Franco, Director of The Conference Board’s Consumer Research Center, commented: “Consumers are considerably less pessimistic about current business and labor market conditions than they were in January. And, despite further increases in gas prices, they are more optimistic about the short-term outlook for the economy, job prospects, and their financial situation. ”

Consumer Confidence
(Click on chart to enlarge)

(Recessions shaded)

The chart shows that consumer confidence peaked at about 70 earlier in the year before dipping to around 40. Now it's back to 70 again. Let's hope this becomes part of a long, sustained climb.

The chart reveals robust consumer confidence accompanying every period of prosperity. That's why this important indicator must maintain its assent. We can not reasonably expect a prosperous economy if consumers are pessimistic.

The recent recession was so severe that consumer confidence dipped into the 20s, a post--World War II low. Now we’re back up to levels that usually accompany recession. But the trend is good if we measure from the recent trough.

Let's keep hope alive!

(To be fully informed visit http://www.beyourowneconomist.com/)

© 2012 Michael B. Lehmann

No comments: