According to the latest report from The Conference Board, the economy remains in neutral. And although short term expectations dropped from July, longer term income expectations rose 2.7 percent.
Current situation falls, expectations rise
Here at Auto Credit Express, we think it's interesting to study the mood of the nation. After all, if people are feeling good, car sales usually increase. If people aren't feeling good about themselves or their futures, what usually happens is what we've been going through for the past year or so.
One of the surveys that is particularly interesting is conducted by The Conference Board and its findings are released each month. This is what the current consumer confidence report found:
August 26, 2008
“The Conference Board Consumer Confidence Index™, which had improved moderately in July, made further gains in August. The Index now stands at 56.9 (1985=100), up from 51.9 in July. The Present Situation Index decreased to 63.2 from 65.8 last month. The Expectations Index, however, increased to 52.8 from 42.7 in July.
The Consumer Confidence Survey™ is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for August's preliminary results was August 19th.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: "Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement by early next year. Declines in the Present Situation Index, both in terms of business conditions and the labor market, appear to be moderating. The Expectations Index, which posted a significant gain this month, suggests better times may be ahead. However, overall readings are still quite low by historical standards and it is still too early to tell if the worst is behind us."
Consumers' assessment of current conditions did not improve in August. Those claiming business conditions are "bad" increased to 33.2 percent from 32.6 percent, while those claiming business conditions are "good" edged up to 13.4 percent from 13.2 percent last month.
Consumers' appraisal of the labor market has turned bleaker. Those saying jobs are "hard to get" rose to 32.0 percent from 30.2 percent in July, while those claiming jobs are "plentiful" declined to 13.1percent from 13.6 percent.
Consumers' short-term expectations improved again, but still remain quite negative. Those expecting business conditions to worsen over the next six months declined to 25.8 percent from 32.4 percent, while those expecting conditions to improve rose to 11.9 percent from 9.2 percent. The outlook for the labor market was also less pessimistic. The percent of consumers anticipating fewer jobs in the months ahead decreased to 30.6 percent from 37.3 percent, while those expecting more jobs increased to 10.5 percent from 8.0 percent. The proportion of consumers anticipating their incomes will increase improved slightly to 14.7 percent from 14.3 percent.”
Source: August 2008 Consumer Confidence Index™
The Conference Board
The Bottom Line
So it appears from the report that in the short term, most of us still see the overall economy as getting worse before it gets better. The good news, though, is that many of us do see light at the end of the current economic tunnel.