Consumers perk up, but uncertainty rules
November 25, 2008,
New York -- The Consumer Confidence Index recovered somewhat from the all-time low registered in October, but consumers clearly are unclear about when and how economic conditions will improve.
Among other indicators, the Present Situation Index decreased to 42.2 from 43.5 last month; the proportion of those surveyed claiming business conditions are “bad” increased to 40.3% from 37.1%, while the much smaller fraction saying business conditions are “good” edged up to 9.9% from 9.4% last month; and those saying jobs are “hard to get” rose to 37.2% from 36.6% in October, while those claiming jobs are “plentiful” decreased to 8.8% from 9.0%.
On the positive side, The Expectations Index increased to 46.7 from 35.7 in October, and the short-term outlook was less pessimistic, with the proportion of those surveyed who anticipate business conditions to worsen over the next six months declined to 28.1% from 36.5%. Still, those expecting conditions to improve rose to just 11.4% from 9.6%.
Lynn Franco, director of The Conference Board Consumer Research Center, said, “Inflation expectations, which have been at historically high levels in recent months, subsided considerably as a result of falling gas prices. But, despite the improvement in the Expectations Index this month, consumers remain extremely pessimistic – and the possibility that economic growth will improve in the first half of 2009 remains highly unlikely.”
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