Consumer Confidence Improved In December
Doug Short | Dec 30, 2015 04:31AM ET
The latest Conference Board Consumer Confidence Index was released this morning based on data collected through December 15. The headline number of 96.5, was an increase from the November final reading of 92.6, which is an upward revision from 90.4. Today's number was above the press release .
"Consumer confidence improved in December, following a moderate decrease in November," said Lynn Franco, Director of Economic Indicators at The Conference Board. "As 2015 draws to a close, consumers’ assessment of the current state of the economy remains positive, particularly their assessment of the job market. Looking ahead to 2016, consumers are expecting little change in both business conditions and the labor market. Expectations regarding their financial outlook are mixed, but the optimists continue to outweigh the pessimists."
Putting the Latest Number in Context
The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.
On a percentile basis, the latest reading is at the 53% level of all the monthly data points since June 1977. That's an increase from 43% previous month.
For an additional perspective on consumer attitudes, see the most recent Reuters/University of Michigan Consumer Sentiment Index . Here is the chart from that post.
And finally, let's take a look at the correlation between consumer confidence and small business sentiment, the latter by way of the National Federation of Independent Business (NFIB) Small Business Optimism Index . As the chart illustrates, the two have tracked one another fairly closely since the onset of the Financial Crisis, although a bit of spread has appeared in the second half of 2015.
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