Consumer Confidence (or the lack thereof!)

This morning Consumer Confidence data for August was released. Before I tell you what it was, you probably can guess what it was. First, July's data. It was revised from 59.5 to 59.2. Expectations for August were for it to come in at 52.0, a significant drop from July. But what was not expected was just how bad it would really be. Are you ready for it? Well it came in at 44.5! That is a huge drop.

In spite of all the hype in the stock market these past week or two that these are the time to be buying, Consumers are telling us exactly how they think this economy is doing. The Conference Board conducts a monthly survey of 5000 households to ascertain the level of consumer confidence. The report can occasionally be helpful in predicting sudden shifts in consumption patterns, though most small changes in the index are just noise. Only index changes of at least five points should be considered significant.

Below is a chart from WallStreetCheatSheets which shows this data from 1985 to May of 2011. You can see where this month's data would be on this chart as I have placed a red X on where it came in. There is also a Table which shows averages over a number of years to put this data in context.


Let's face it, anything less than 50 means that the data is measuring Consumer's Lack of Confidence. That is running at 100-44.5=55.5! Now I have some stocks I want to sell ya, as they are cheap right now, right!?