With consumer spending representing 70% of the U.S. economy, rising confidence levels are important. The Conference Board’s latest monthly measure of consumer confidence rose sharply to 39.2 in April, versus 26.9 in March. The index is based on a representative sample of 5,000 U.S. households.
The latest measure was the second consecutive rise, and was at its highest level since last November. In contrast, the index hit a record low in February near 25.
We still have a long way to go. For the index, 1985 equals 100. The index averaged 57.9 in 2008 and was at 90.6 in December 2007, the month the economy officially entered the recession.
The primary index is split into two components, the Present Situation index and the Expectations index for the next six months. While the Present Situation index had a slight gain from 21.9 to 23.7, the Expectations index rose sharply from 30.2 to 49.5.
Those anticipating business conditions will worsen over the next six months declined to 25.3 percent from 37.8 percent, while those expecting conditions to improve increased to 15.6 percent from 9.6 percent in March. The employment outlook was also considerably less pessimistic. The percentage of consumers anticipating fewer jobs in the months ahead decreased to 33.6 percent from 41.6 percent, while those expecting more jobs increased to 13.9 percent from 7.3 percent.
Jeff Thredgold is an economic consultant to Zions Bank
Featured in the 6 May 2009 issue of Jeff Thredgold’s Tea Leaf newsletter.
*Artwork from imeusdesign under Creative Commons license at Flickr.com.
