Confidence Heads Back South

All of the optimism from Joe Q. Public may be waning if the most recent data from The Conference Board holds up. Particularly as job anxiety keeps mounting.  The October reading fell down to 47.7 this month from a revised figure of 53.4 in September.  The original report showed September at 53.1.  Dow Jones had an estimate of 53.2 and Bloomberg had an estimate of 54.0.

The drop was across the board.  The reading’s present situation index of current economic conditions fell down to 20.7 from a revised 23.0 reading in September. The consumer expectations component for economic activity out six-months dropped down to 65.7 from a revised figure of 73.7.

The reading showed that those saying jobs are “hard to get” rose to 49.6% from 47.0% in September.  Those calling jobs plentiful was a mere 3.4%, down from 3.6% in September. The real issue here is that the employment outlook is getting worse rather than better.  Those surveyed who expect more jobs in the coming months was reported at 16.3%, down from 18.0% in September.  Those surveyed who were expecting fewer jobs in the coming months came in at 26.6% in October, up from the 22.9% in September.

This shows that consumers are still very pessimistic for the present day conditions, yet they are staying somewhat upbeat about the next six-month period.  This drop in consumer confidence follows three months of better data and probably raises more questions about any solid recovery.  It also dispels the notion that Joe Public is going to extravagant when the holidays come around.

Investors use this data more readily than other measurements of confidence because it is more fresh data and comes from a survey of 5,000 households.  It is also much fresher data than other surveys as the cut-off date was October 21.

JON C. OGG
OCTOBER 27, 2009