Consumer Confidence Rebounds
Sept. 12 (Bloomberg) -- Confidence among U.S. consumers rose the most in more than four years as a decline in gasoline prices provided relief from rising unemployment and tumbling home values. The Reuters/University of Michigan preliminary index of consumer sentiment increased to 73.1 this month, the biggest increase since January 2004, from 63 in August. The measure averaged 85.6 in 2007 (see top chart above).NEW YORK, September 11, 2008 — Although the calendar indicates the end of summer is quickly approaching, it appears consumer confidence may be heating up, according to the most recent results of the RBC CASH (Consumer Attitudes and Spending by Household) Index, which advanced for the second consecutive month. Overall consumer confidence climbed 35 points to stand at 69.2, compared to 33.8 in August (see bottom chart above). This month's RBC CASH Index was buoyed by an 81 point increase in Americans' expectations for the future. Gains also were made in every other facet of consumer sentiment, including assessments of current conditions, investing and job security.
5 Comments:
This just proves that the drop in consumer confidence was over done. People over react to gas prices rising and falling because they are so visible. So, when gas prices rose from $3 to $4 per gallon the reaction was more sever than justified from the consumer.
THE RBC index almost exactly mirrors Obama's likelihood of winning on InTrade...people are getting more optimistic now that McCain has shot into the lead!
kevin,
My boss actually made a similar comment about that, not necessarily about mccain but about the election in general. I believe its gas, because beyond the obvious, the inflation points on the Conference board and U Michigan measures were exactly when oil peaked. IF you look at the July surveys which are constructed by two half data samples... one int he early part of the month and one int he late, the gain in July was all due to the second half, when oil started declining.
If anything, i would say mccain doing better is more caused by stronger consumer confidence, not the other way around. Though most of McCain's gain i think has more to do with the convention's, Palin, Georgia bringing foreign policy back as an important issue and so on.
Head fake!
Just give it another six months...
That said, even in the worst bear market, life in the USA is still great. Just not as great as it will be, AFTER the bear gets done wreaking havoc...
> THE RBC index almost...
kevin, ya beat me to it. I was thinking the same thing. I wouldn't say it's a definite causal connection, but I have to suspect that the average joe out there may feel a lot more secure knowing that the libtards may not be able to manage to cram an incompetent socialist fool into the PotUS.
ej:
I'm sure gas is also relevant. One obvious sign of this would be if that confidence goes down with the recent hurricane-driven rise in prices. Probably not as much, unless it is sustained, but it should show a downturn next month if this is the case, I would argue. Keeep your eyes open to that.
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