We got another dose of bad-tasting medicine on the economic front. After the dreaded report came from Case-Shiller on January housing data, we saw awful figures from the Conference Board’s Consumer Confidence Index and then from the Institute for Supply Management’s Chicago Purchasing Managers Index.
The Conference Board reported that its Consumer Confidence Index was mostly unchanged in March at a reading of 26.0. Unfortunately, that is on the heels of an all-time low reading in February. The February number was revised to 25.3 from 25.0. We had a consensus from Dow Jones of 27.7. The bad news is still worse than expected. The present situation index fell to 21.5 from February’s 22.3, but the expectations index rose to 28.9 from February’s revised 27.3 reading. This data suggests that the overall economy remains weak and that more job losses are coming. Consumers remain extremely pessimistic about the short-term future and do not expect to see a turnaround in economic conditions over the coming six months. This data was based on a sample of 5,000 households and the cut off date was March 24.
The Institute for Supply Management said that its Chicago Purchasing Managers Index reading came in at 31.4, well below what Dow Jones had expected to be a reading of 34.3. With 50.0 being the Maginot Line of Growth versus Contraction, today’s numbers show that the slow manufacturing and materials climate is continuing. This often acts as a pre-read to the total ISM numbers.
Jon C. Ogg
March 31, 2009
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