Tuesday, April 29, 2008

Consumer Confidence Falls Less Than Estimates

- Consumer Confidence for April fell to 62.3 versus estimates of 61.0 and an upwardly revised 65.9 in March.

BOTTOM LINE: Consumer Confidence fell less than economists expected this month, Bloomberg reported. The Present Conditions component of the index fell to 80.7 from 90.6 in March. The Expectations component of the index rose to 50.10 from 49.40 the prior month. Those planning to purchase an automobile rose to 5.6% versus 5.4% the prior month. Those planning to purchase a major appliance rose to 31.9% from 30.1% the prior month. Confidence in the northern regions of the country remains extraordinarily depressed, averaging 45.7. Confidence in the remaining regions of the country currently averages 71.7. Consumer Confidence in the Northeast Central Region, which is the lowest in the country, is currently 41.8. Most major media outlets and hedge funds are headquartered in this region. At its very worst during the 2000-2003 technology bubble-bursting bear market, in which the Nasdaq collapsed over 70%, confidence in the Northeast Central Region hit 58.3 during the month of February 2003. The stock market had already made a major low four months earlier in October 2002. The DJIA is currently 8.3% from its all-time high hit in October of last year. While the current “US negativity bubble” shows few signs of bursting, I continue to believe consumer confidence will improve from current levels through year-end as stocks rise, the US dollar strengthens, energy/food prices fall, inflation decelerates, the job market improves, election uncertainty ends, the American Axle strike ends, the effects of fiscal/monetary stimuli take hold, extreme housing fears subside, credit turmoil ends and interest rates remain relatively low.

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