Consumer Confidence Data Not Representative of Today

The Conference Board has released some surprising data that was stronger than many would have guessed.  The September confidence index came in at 59.8, up from 58.5 in August.  The Present Situation index fell to 58.5 from 65.0 in August, while the Expectations Index rose to 60.5 from 54.1 in the prior month.  Based upon the malaise seen this week and last week, these numbers may seem off or just wrong, and there is an explanation for this.

Part of the problem here with these numbers are a survey of 5,000households and the cutoff date for the data was September 23, 2008.Things were bad then too, but nowhere like over the last week after abailout package failed and after the stock market crashed.

The Conference Board even states that these numbers may not berepresentative of today.  Its director Lynn Franco noted, "theseresults did not capture all of the tumultuous events in the financialsector this month, and until the dust settles a bit more, we will notknow the full impact on consumers’ expectations."

Further data is as follows:

• Those saying business conditions are "bad" increased to 34.2% from 32.7%, while those claiming business conditions are "good" declined to 12.5% from 13.7% last month.
• Consumers’ assessment of the labor market continues to deteriorate. Those saying jobs are "hard to get" rose to 32.8% from 31.7% in August, while those claiming jobs are "plentiful" decreased to 12.2% from 13.5%.
• Consumers anticipating business conditions to worsen over the next six-months fell to 21.3% from 25.2%, while those expecting conditions to improve rose to 13.5% from 12.0%.
• The outlook for the jobs showed a moderate improvement from August with consumers anticipating fewer jobs in the months ahead declining to 26.8% from 30.0%/  Those anticipating more jobs increased to 11.8% from 10.7%.
• Consumers expecting their incomes to increase in the months ahead did fall to 14.2% from 15.4%.

Until we see data from confidence IF a bailout bill passes or not, this is all chicken feed until then.

Jon C. Ogg
September 30, 2008