Tuesday, July 27, 2010

More on Consumer Confidence data for July

In order to put the data in perspective here are some facts on Consumer Confidence data released today by the Conference Board:

The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index slipped to 50.4 in July, down from the revised 54.3 in June. Economists surveyed by Thomson Reuters expected 51.0. Just to put the number in perspective, if you look at a chart of the data from Market Harmonics charting it shows that Consumer Confidence has stayed relatively low and the same since June 2009. These are the facts. To look at their chart click here. It has not been updated with the data released today, but if you look at the last point, which should be revised upward to 54.0, not 52.9, and then see where 50.4 is on the axis, you can clearly see we are in the same range we have been in for over 1 year and that we are really not feeling better.

The decline follows last month's nearly 10-point drop, from 62.7 in May, which marked the biggest since February, when the measure also fell 10 points.

One component of the Consumer Confidence Index, which measures how people feel now about the economy now, declined to 26.1, from 26.8. The other barometer, which measures respondent's outlook over the next six months, declined to 66.6, from 72.7 last month.

This is not good as Consumers represent 70% of the economy. Americans are reluctant to spend any money on any non essentials it seems, understandably with the jobless rate near 10%.

The Conference Board survey is based on a random survey that was mailed to 5,000 households from July 1 to July 21. It is relevant and a leading indicator rather than what the reported GDP number that will be released Friday, which is a lagging indicator. Tomorrow's Durable Goods orders while can be a leading indicator, it doesn't mean that the Sales will be there but rather merely a build of some inventories so remember that tomorrow when the data is reported at 8:30am EST.

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