Consumer Confidence
Worse Than a War!
Notice how we have plunged down to the level we were at before the invasion of Iraq five years ago. Consumers perceive this recession to be as bad as a war!
The index is at 62.3 now, which is 0.2 below the previous low of 62.5 set in March of 2003. Keep in mind that the 62.3 number could be revised upward next month though.
Also notice how this data began its plunge in September 2007, a month before the S&P 500 topped in October. That was also a few months after people began pulling their money out of mutual funds.
This is definitely a consumer-led bear market. It looks like higher mortgage payments, falling home values, increased food costs, and higher energy costs caused people to pull money out of the stock market in order to pay bills, and then go into a depression after they saw layoffs begin to surge.
(Note: the plunge in late 2005 is attributed to the first big spike up in gasoline prices that occurred at that time after Hurricane Katrina knocked out oil facilities in the Gulf of Mexico.)
About the Data
This is a survey that asks 5,000 Americans how much confidence they have in the economy. It is done each month by The Conference Board, which also produces many other reports, and is worth joining if you are a sizable company.
Next Update
The next survey will be released on Tuesday, May 27, 2008 at 10am EST.
