Wikinvest Wire

Consumer confidence "more bad" in June

Tuesday, June 30, 2009

Financial markets are reacting rather poorly to the first "more bad" report in months on consumer confidence from the Conference Board. Usually cheery Econoday notes that the "consumer sector appears to have crumbled in June" after the one-two punch of sagging consumer confidence and a disappointing report on chain-store sales.
IMAGE The consumer confidence index dropped some ten percent, from 54.9 in May to 49.3 in June, news that came as a surprise to analysts who were looking for further improvement as rising unemployment and rising gasoline prices continue to take their toll.

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2 comments:

Anonymous said...

and those consumer confidence numbers are "dead nuts" - just like all the rest of the numbers that come out every month

Paul said...

It is simply amazing how the Conference Board's numbers are derided because they are weighted more by employment than by the performance of equities as with the Univ. of Michigan's numbers. After all some say, everyone knows that employment is a lagging indicator.

All I care to say to such opinion is, sure it is. It lags consumer spending (chain stores), residential real estate (prime mortgage defaults, jumbo implosion & Alt A nightmares) and consumer credit (strike that, I mean debt). If 18.1% drop in Case-Shiller in one of the best 3 months of RRE sales is a triamph then I hesitate to see what more bad come winter may reflect or how a rapid rise to a 12% savings rate could impact chain store sales and the results from overstock.com during the upcoming holiday sales period, especially after the smashing success this summer sales season has been!

And just think of it, this is the best that our government and markets can produce in the effort to restore confidence without reestablishing trustworthiness first. After all, everyone knows that any attempt to restore confidence without restoring trustworthiness makes the efforts at restoring confidence a confidence game.

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