Courtesy of Mish.
Confidence Improves Hooray!
The consumer conference board says Consumer Confidence Index Improves in December.
The Conference Board Consumer Confidence Index® now stands at 96.5, up from 92.6 in November.
How did the board determine confidence was up?
“The Consumer Confidence Survey uses an address-based mail sample design. The CCS mailing is scheduled so that the questionnaires reach sample households on or about the first of each month. The targeted responding sample size—approximately 3,000 completed questionnaires—has remained essentially unchanged throughout the history of the CCI.”
Deep Meaning
Amazingly, a mail sample of 3,000 is sufficient to determine the confidence of the entire nation. You can buy the data if you want. I’ll take a pass.
The Fed would have you believe consumer confidence numbers have some deep meaning. Many others believe confidence is a leading indicator of spending which makes confidence a leading indicator of the economy.
Bloomberg states “Consumer sentiment is directly related to the strength of consumer spending.”
Yellen’s Confidence
In a December speech The Economic Outlook and Monetary Policy Fed Chair Janet Yellen commented on “confidence” (both consumer confidence and hers) several times.
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