JPMorgan on the Consumer Confidence Data

December 30th, 2008 12:26 pm | by John Jansen |

Here is the note that JPMorgan economists sent to clients regarding the latest consumer confidence report. JPMorgan’s assessment: gloomy.

 The Conference Board consumer confidence index fell to a new all-time
   low of 38.0 in December, just surpassing the previous all-time low of
   38.8 that was set in October. The labor market details were also very
   weak. The labor market differential—the difference between the share of
   respondents saying jobs are plentiful and those saying jobs are hard to
   get—fell to -35.8% from -28.4%, one of the larger declines on record.
   This combined with a rise in continuing claims suggests that the
   unemployment rate will hit 7.0% in December, up from 6.7% in November.

   ·  The drop in confidence this month is particularly notable given that
   nominal gas prices have recently fallen to their lowest level in almost
   five years.

   ·  The present situation index declined to 29.4 from 42.3 and is at its
   lowest level since April 1992. The expectations index declined to 43.8
   from 46.2, though it is still above the all-time low of 35.7 that was
   set in October. All components of these two indices were weaker.

   ·  Buying plans improved slightly in December but were still quite weak.
   The share of people planning to buy a car within the next six months
   rose to 4.7% from 3.8% (the all-time low); the share planning to buy a
   home increased to 2.5% from 2.1% (the lowest since 1982); and the share
   planning to buy a major appliance increased to 26.2% from 24.5% (the
   lowest since 1995).

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