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2008 Economic Calendar |
The Conference Board compiles a survey of consumer attitudes on present economic conditions and expectations of future conditions. Five thousand consumers across the country are surveyed each month. While the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month. Why Investors Care
| Released on 5/30/06 For May 2006 | ||||||||||||
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Highlights
Consumer confidence fell sharply in May but not quite as sharply as expected, down to 103.2 from 109.8 in April. The decline reflects the effects of high gas prices, but job readings also deteriorated. Those saying jobs are hard to get rose a bit to 20.5 percent vs. 19.7 percent with those saying jobs are plentiful dipping to 28.6 percent vs. 29.4 percent.
Inflation expectations, a series the Conference Board is now releasing to the public and highlighted in Econoday's Short-Take last week, showed another effect of high gas prices. The 12-month expectation reading rose sharply, to 5.6 percent from 5.3 percent. For the bond market, this reading will likely offset any benefit from the overall drop.
One big negative was a sharp decline in overall consumer expectations, down to 83.7 from 92.3 in April. The overall index was held up by firmness in the present situation, at 132.5 vs. 136.2, but falling expectations have in the past been consistent with subsequent declines in the present situation.
Financial markets were choppy but little changed in initial reaction to the data. Consumer confidence readings are not a reliable indicator of future retail spending, but the report does highlight the effects of high gas prices on both confidence and inflation psychology. Chain-store reports on Thursday will offer the next information on the consumer.
The Conference Board's consumer confidence index increased 2 percentage points in April to 109.6. This was in contrast to the University of Michigan's consumer sentiment index, which has declined recently. However, these two surveys can be at odds with one another. In any case, accelerating inflation tends to be a drag on confidence.
Consumer confidence Consensus Forecast for May 06: 101
Range: 96.5 to 104.5
![[Chart]](chart.gif)
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Typically retail sales will move in tandem with consumer optimism - although not necessarily each and every month. |
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