Last Update: 30-Dec-14 10:17 ET
- The Conference Board’s Consumer Confidence Index increased to 92.6 in December from an upwardly revised 91.0 (from 88.7) in November. The Briefing.com consensus expected the index to increase to 94.4.
- Over the last month, gasoline prices dropped to their lowest point in more than five years, equity markets have reached historic highs, and the employment situation notably improved.
- Clearly, the factors behind the confidence data warranted a strong increase in the overall index. Yet, the December reading is still below October’s 94.1 report.
- Fortunately, consumer confidence is not a reliable indicator for future consumption growth. Consumption relies on income gains. As long as income continues to move on an upward-trending path, consumption growth should follow.
- Consumer sentiment has little influence on consumption. As long as payroll levels continue to expand, the resulting income growth should keep consumption gains steady regardless of the monthly ebbs and flows in sentiment.
|Employment ('plentiful' less 'hard to get')
|1 yr inflation expectations