America’s Incredible Consumer Confidence Index

In his latest post, Edward Hugh marvels at the Spanish population’s optimism that the economy will soon turn. While they correctly judge the current situation as abysmal, for whatever reason, the Spanish believe things will turn up shortly.  More power to them.

But the Spanish aren’t the only true believers. Witness America’s own consumer confidence numbers from this past Spring.

the Conference Board said its Consumer Confidence Index leapt from a poor 40.8 reading in April to a less poor 54.9 reading for May. This was the highest reading in eight months.  But, the present situation is terrible, 28.9.  It is expectations that are through the roof with the reading jumping over 20 points from 51.0 to 72.3.  That is a gargantuan one-month move.

Consumers ‘do believe in the green shoot story’, May 2009

Where are things in the U.S today?  Expectations are still elevated, but the Present Situation Index has improved to close the gap.

The Conference Board Consumer Confidence Index®, which had increased in December, improved further in January. The Index now stands at 55.9 (1985=100), up from 53.6 in December. The Present Situation Index increased to 25.0 from 20.2.  The Expectations Index increased to 76.5 from 75.9 last month.

Consumer Confidence Survey® Press Release, 26 Jan 2010

So, the gap between reality and expectations may not be as wide in America, but the Americans are still a pretty optimistic lot if you asked me.

  1. Matthew says

    Is it possible that optimism is relative? Things are SO bad in Spain, how is it possible things could not get worse. As the song says:

    “things can only get better”.

    The more terrible things are, the more likely people are to believe that they will improve. They believe the economy to be a rubber band. The more you stretch the economy into recession, the quicker it will bounce back.

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