The Conference Board seemed a little surprised that it found in increase in confidence when it took consumers’ economic temperature for September. Of course, the consumer check up preceded much of the tumult on Wall Street, so the move up from August’s 58.5 reading to September’s 59.8 may be little more than prelude to a slide when October’s numbers come in. The Conference Board September found quite a few things which look odd in light of current events. The Present Situation Index actually decreased from 65.0 to 58.8, but the Expectations Index shot up from 54.1 to 60.5.
Analysis was provided by Conference Board’s Lynn Franco, who said "September’s increase in the Consumer Confidence Index was due solely to an improvement in the short-term outlook. However, these results did not capture all of the tumultuous events in the financial sector this month, and until the dust settles a bit more, we will not know the full impact on consumers’ expectations. Shocks, such as the 1987 crash, generally tend to have a temporary adverse affect on confidence, lasting on average two to four months, unless they result in significant job losses. Just as noteworthy, consumers’ assessment of current conditions continues to indicate that the current economic environment remains quite weak."
Are business conditions bad? 34.2% say they are compared to only 12.5% who think they’re good; this compares to 32.7% and 13.7% in August. Employment figures were similar: 32.8% said jobs are hard to come by compared to 12.5% saying they’re plentiful; compared to 31.7% and 13.5% in August. Still, only 21.3% think business conditions will worsen over the next six months, compared to only 25.2% who thought that in August.
RBR/TVBR observation: The one thing about the economy is that we all have a stake in keeping it healthy. Now that the problems with it seem to have everybody’s attention, perhaps our combined positive exertions will help turn things around in surprising ways.