Consumer Confidence Is a Lagging Indicator

According to the Conference Board's survey of consumer confidence (top chart), released today, things deteriorated in October. The University of Michigan's survey (bottom chart), released about 10 days ago, showed a similar setback. I've never paid much attention to surveys of confidence, mainly because they tend to be lagging indicators. As these charts show, consumers are often quite happy until just before a recession starts, and quite depressed well after a recovery begins.

If there is any message to be drawn from the recent survey data, it is that the bottom in economic activity was a couple of months ago—further confirmation that the recovery started last summer.

Comments

[hoager:]

wow..who cares!! the point is the market seems to be way ahead of the numbers. if a bull doesn/t like a specific number..throw it out! nobody has, or can get, a job...lagging indicator for you....bad news for the millions without one.

Oct 27 04:15 PM

[j-dub:]

If it's bad throw it out.
If it's less worse, scream and shout!!!!

Oct 27 04:18 PM

[talld:]

The government is well known for fudging figures, for example, for the first ten years aids was in the USA, the CDC unstated the problem by orders of magnitude or more.

The current economic recovery can be outed by looking at non-federal government information, such as shipping containers arriving at a port. If you look at these figures, it becomes apparent that the US has not recovered.

As for housing, we are propping that up with extremely low interest rates (of the kind that started the bubble) lower even than they were during the bubble, and tax incentives, along with promises from the government to pay any loans a bank makes today on real estate which goes into foreclosure.

We are still not at the half way point in foreclosed homes, and the commercial sector is just now hitting the foreclosure skids with 5% of all apartments now in some state of foreclosure.

It is true they needed to lie to people through the mainstream press, so when the banks failed, they instead called it a "bailout" but it was a bank collapse and it took ten trillion to fix it not one trillion as is most often reported in the mainstream press. (source www.bloomberg.com/apps... )

Oct 27 08:36 PM

[jeremiah74:]

so when the data started being "less worse" than expected you were cheering that here we are, its a 'V' no doubt

now when data actually starts to get worse than expected you are cheering that here we are, its a 'V' no doubt

your optimism is admirable. unfortunately this business is about thinking, not hoping..

Oct 28 03:27 AM