Tuesday, February 23, 2010

Consumer Confidence- 02/23/10

Via Bloomberg:

The consumer's mood is definitely downbeat, a strong indication that the jobs market isn't improving. The Conference Board's consumer confidence index fell back in a surprising and sizable way, down nearly 10 points to 46.0 in February (January revised to 56.5). Expectations, the index's leading component, fell more than 13 points to 63.8 reflecting a sweeping sentiment downturn in income, employment, and business conditions. The expectations index never really got going last year, barely approaching the watershed 80 level, a level consistent in the past with economic expansion.

The trouble in expectations signaled trouble for the present-situation component which dipped into the teens and toward the record lows of the early 80s. The index fell nearly 6 points to 19.4, reflecting pessimism over current business conditions where only 6.2 percent of the 3,000-home initial sample describe them as good. Only a miniscule 3.6 percent describe jobs as currently plentiful with 47.7 percent, up 1.2 percentage points from January, describing them as hard to get. This latter reading, which gets a lot of attention, will raise talk of trouble for February's jobs report.

Note that consumer confidence may have weakened but momentum and recent indications on the retail sector suggest that consumers haven't pulled back their spending, at least yet. The Reuters/University of Michigan consumer sentiment index for February, which edged lower in an initial reading at mid-month, will be posted on Friday.

Wow, disappointing numbers. The Dow rallied about 33 points in early trading on strong earnings from Home Depot. However, when this report hit the market at 10 EST equities and commodities sold off. NYMEX Crude was off 1.84% midday from its highs of $80.31/barrel from yesterday's trading session. Natural Gas continues to sell-off as reports of warmer weather than usual in the Midwest began to circulate this week. Natural Gas is trading at $4.78 per British Thermal Unit down 2.35% at the close of NYMEX trading.

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC

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