US consumer confidence fell to 91.3 in Dec

NEW YORK, Dec 30 (Reuters) - The Conference Board's U.S. Consumer Confidence Index (News - Websites) fell to 91.3 in December from an upwardly revised 92.5 in November, the corporate-backed research group reported on Tuesday.

The number was originally reported at 91.7 in November. Economists polled by Reuters had forecast a median fall to 91.5 in the December index.

Consumer Confidence Index Dips in December

http://www.conference-board.org/economics/consumerConfidence.cfm

December 30, 2003

The Conference Board's Consumer Confidence Index, which had increased last month, slipped in December. The Index now stands at 91.3 (1985=100), down from 92.5 last month. The Present Situation Index declined to 73.9 from 81.0. The Expectations Index, however, increased to 102.9 from 100.1.

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 NFO WorldGroup. NFO is one of TNS group of companies (LSE: TNN). The cutoff date for December's preliminary results was December 16.

"The improvement in consumers' expectations signals healthy economic growth in 2004," says Lynn Franco, Director of The Conference Board's Consumer Research Center. "But job worries continue. Consumers' lackluster assessment of current conditions reflects continuing anxiety about labor market conditions. While consumers expect the job situation to improve in the months ahead, until a significant turnaround takes place, consumers' optimism about current-day conditions will continue to lag behind their expectations."

Jobs Still "Hard to Get"

Consumers' assessment of current labor market conditions deteriorated in December. Those saying jobs are "hard to get" rose to 32.6 percent from 29.6 percent. Those claiming jobs are "plentiful" declined to 12.5 percent from 13.5 percent. Consumers' appraisal of current business conditions also lost ground, with those rating conditions as ?good? decreasing to 18.7 percent from 19.9 percent. Those claiming conditions were "bad" rose to 24.4 percent from 23.6 percent.

But consumers' short-term outlook remains upbeat. Those anticipating business conditions to pick up steam in the next six months rose to 26.8 percent from 24.5 percent. Consumers expecting conditions to worsen increased slightly to 8.1 percent from 7.2 percent.

The employment outlook also improved. Those anticipating more jobs to become available in the next six months increased to 21.7 percent from 18.5 percent. Those expecting fewer jobs to become available decreased to 16.9 percent from 18.0 percent. Consumers anticipating an increase in their incomes rose slightly to 20.7 percent from 20.2 percent.

Source: December 2003 Consumer Confidence Index, The Conference Board.

Clueless economist ping...

The problem is that adjusted CPI, Real Earnings, GDP, chained dollars, and proforma corproate earnings just aren't filtering down to folks who don't live in an adjusted world.
___________________________________________________________

=DJ FED WATCH: Confidence Gauges Seem Out Of Synch With Data

.
By Michael S. Derby
A DOW JONES NEWSWIRES COLUMN

NEW YORK (Dow Jones)--What is going on with the consumer confidence numbers?

The two major surveys of consumers' assessment of current and future economic activity, released separately by the University of Michigan and The Conference Board, have over the last several months been particularly volatile, with readings well outside of expectations.

While economists are careful not to read too much into the heavy chop of the confidence data, many nonetheless recognize that the reports have been showing some hard-to-explain swings that in some cases seem to be completely at odds with what other data are saying about the economy.

The contradictory performance is also serving as yet another reminder as to why, despite the considerable attention many devote to such reports, their value as an economic indicator isn't all that great.

December has been the toughest month for the two surveys. The University of Michigan report, which is released twice monthly in preliminary and then month-end form, saw a notable turn downwards in the mid-December survey relative to November, which then was then largely washed out in the survey's final reading for the month.

Economists were willing to view the Michigan report as a bit of an aberration. Its survey size is relatively small, and any data series is bound to jump around at times.

On Tuesday though, the Conference Board served up its read on confidence levels during December. The overall reading for December fell to 91.3, from a revised 92.5 the month before. The shocker was in the present situation index, which seeks to gauge how consumers rate their immediate circumstances. It dropped sharply to 73.9, after November's revised 81.0.

The private research group also noted that those who say jobs are "hard to get" rose to 32.6% in December from 29.6% the month before. Those who deemed jobs "plentiful" fell to 12.5% of respondents, versus 13.5% in November.

By any yardstick then, the Conference Board's findings look a little strange. Economists at Wachovia Securities said the labor market finding was "one of the most disturbing aspects" of the release.

More broadly, over the last several months there has been a string of nearly universally upbeat economic statistics, covering most of the economy's components. Even the long suffering labor market has managed to carve out four straight months of growth, amid a declining unemployment rate.

So how do the numbers turn up and then consumers get more downbeat, at least based on the findings of the sentiment surveys? Economists aren't entirely sure, but they have a few ideas.

Where's Mine?

"Consumers are getting a little impatient" and wonder why all the upbeat news hasn't done much for them yet, said Stephen Stanley, senior market economist with RBS Greenwich, in Greenwich, Conn. "Where's my big raise? Where's my job? I wonder if there's a bit of that going on" and whether that's causing some of the unusual findings in the confidence surveys, he explained.

Some believe there's also a bit of payback going on. Between October and November, the overall Conference Board index scored more than a 10 point gain. Less dramatically, the "jobs hard to get" measure also improved in the October-November period, and even with the most recent reading, December's level was better that seen in October.

Looking at both reports, UBS economist Jim O'Sullivan said "these numbers can be volatile, but the net of it is positive," even with December's hiccup. "None of these numbers ever move in a straight line" but the trend in consumer confidence levels is showing that the recovery seen in economic statistics is seeping through to households' moods.

It's always worth nothing that the import of consumer confidence data can only be taken so far, a fact most economists fully recognize. In a point often advanced by Federal Reserve officials, it's what consumers do with their money, as opposed to their intentions, that truly matters.

What's more, as Stanley, at RBS Greenwich, said "if there is ever a time where we are less interested" in confidence gauges, it's during the holiday season. That's because it's then that the hard numbers on spending really matter. From what's been seen so far "it sounds like Christmas went okay," perhaps most strongly in places where expensive items are sold.

It would seem that it's not a good idea to let glum consumer confidence numbers get you down.

(Michael S. Derby writes about markets, the economy and
the Federal Reserve for Dow Jones Newswires.)

-Michael S. Derby, Dow Jones Newswires; 201-938-4192;
michael.derby@dowjones.com

(END) Dow Jones Newswires

12-30-03 1345ET- - 01 45 PM EST 12-30-03

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