Consumer Confidence Collapses, Missing Expectations Big Time As Present Situation Index Hits 27-Year Low
by ilene - February 23rd, 2010 5:42 pm
Consumer Confidence Collapses, Missing Expectations Big Time As Present Situation Index Hits 27-Year Low
Courtesy of Vincent Fernando at Clusterstock/Business Insider
Consumer confidence missed consensus expectations by a wide margin, coming it at just 46.0 vs. 55.0 expected. This was also a substantial drop form January’s 56.5 reading.
Markets are tanking.
The worst part of the report appears to be the Present Situation Index, which collapsed to a 27-year low:
The Present Situation Index decreased to 19.4 from 25.2. The Expectations Index declined to 63.8 from 77.3 last month. The Consumer Confidence Survey® is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world’s largest custom research company. The cutoff date for February’s preliminary results was February 17th.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer Confidence, which had been improving over the past few months, declined sharply in February.Concerns about current business conditions and the job market pushed the Present Situation Index down to its lowest level in 27 years (Feb. 1983, 17.5).
Moreover, there seems to have been a decline in near-term forward expectations as well.
Consumers’ short-term outlook also took a turn for the worse, with fewer consumers anticipating an improvement in business conditions and the job market over the next six months. Consumers also remain extremely pessimistic about their income prospects. This combination of earnings and job anxieties is likely to continue to curb spending." Consumers’ assessment of current-day conditions soured in February. Those claiming conditions are "good" decreased to 6.2 percent from 8.5 percent, while those claiming business conditions are "bad" increased to 46.3 percent from 44.7 percent. Consumers’ assessment of the labor market was also more pessimistic.…