Consumer Confidence

Earlier this week, the Conference Board announced July’s Consumer Confidence Index (CCI) at 112.6, its highest level since August 2001 (Consumer Confidence Hits 6-Year High). The CCI is a lagging indicator, reflecting where the economy has been, but not necessarily where it is going. Lynn Franco, Director of The Conference Board Consumer Research Center states:

“An improvement in business conditions and the job market has lifted consumers’ spirits in July”

The monthly survey from which the CCI data is compiled, was completed on July 24th, two days before the Dow Jones Industrial Average (DJIA) fell 310 points. Yesterday, a fluctuating week for Wall Street ended with the DJIA falling 281 points and government data demonstrating weaker than expected job growth, and unexpected rises in unemployment (Job growth weaker).

There was a net increase of 92,000 jobs in the month, down from 126,000 added in June, a reading that was revised lower in the latest report. Economists surveyed by Briefing.com had forecast a 135,000 gain in July.

The unemployment rate was 4.6 percent, up from 4.5 percent in June. Economists had forecast that the rate would remain unchanged.

The events from the past week suggest consumer confidence has peaked, which compounds the ongoing credit issues.

Posted on August 4th, 2007 | By: bootstrap economist | Filed under Banking

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