September 30, 2003

Ouch

Bad news about consumer confidence:

Consumer confidence drops below expectations - Sep. 30, 2003: Consumer confidence in the U.S. economy dropped in September, a research group said Tuesday, weighed down by nagging worries about a weak job market. The Conference Board, a business research group based in New York, said its closely watched index of consumer confidence fell to 76.8 from a revised 81.7 in August. Economists, on average, expected confidence to fall to 80.5, according to Briefing.com.

In addition, the Conference Board's "expectations" index, which measures how consumers feel about the future, fell to 88.4 from a revised 94.9 in August. The "present situation" index dropped to 59.5 from a revised 62. "The lack of improvement in labor market conditions continues to dampen consumers' spirits," said Lynn Franco, director of the Conference Board's Consumer Research Center. "Despite September's retreat, consumers remain cautiously optimistic about the outlook for the next six months. Consumer spending is likely to continue at or near current levels."...

Posted by DeLong at September 30, 2003 01:46 PM | TrackBack

Comments

And don't forget the unexpectedly low Chicago-NAPM. All greeted by a large stock market decline and a strong Treasury market gain.

Posted by: Mats on September 30, 2003 01:59 PM

The December Fed funds contract is pricing in pretty good odds of a 25 bp ease. The rest of this week brings more big economic news, so it is entirely possible the expectation of an ease will be overturned. For now, money market folks don't like the data.

Worth noting is that the Chicago PM employment index ducked back below 50 - that means more factory layoffs - and the Conference Board's "jobs hard to get" index hit a new high. It is hard to find anything that the headline confidence index actually predicts, but the "jobs hard to get" data have done a good job of signaling a deterioration in the labor market this year. Mr Mankiw may regret his recent optimism about jobs.

Brad, you've come down off your "criminals in the White House" high. So, wanna get back to the current account and foreign exchange politics? Japan reported its August fx intervention amounts overnight - a new record, topping $40 bln. Then, just to make the point, Japan's finance ministry requested that the Fed intervene during US hours on Japan's behalf, and called it "concerted intervention." A correction was quickly issued, of course, but this is real grandstanding. The BoJ had already sold yen at the open of Tokyo trade. The earlier suspicion was that Japan had taken itself out of the market (intervention this year is covert, so you don't know till the monthly data are reported) to allow Treasury Secretary Snow to focus on China at his upcoming foriegn-exchange-manipulation testimony on Capitol Hill. Guess not.

Posted by: K Harris on September 30, 2003 04:18 PM

Brad,

The CCS is one of the clearest examples of how emotions drive the global economy. Ordinary individuals sharing their perception of the future play a very influential role in macroeconomic decisions.

As neurotechnology use becomes wide spread and individuals tone down anxiety with emoticeuticals, how much will this influence how they perceive problems, and ultimately monetary policies implemented by governments around the world?


Ya think?

Posted by: Zack Lynch on September 30, 2003 06:21 PM

>>As neurotechnology use becomes wide spread and individuals tone down anxiety with emoticeuticals>> Ah, this wonderful brand new world!

Posted by: Mats on September 30, 2003 11:52 PM

"As neurotechnology use becomes wide spread and individuals tone down anxiety with emoticeuticals, how much will this influence how they perceive problems, and ultimately monetary policies implemented by governments around the world?"

I think one could write a wild paper with cross country (panel?) data on consumption of anti-depressants and the dynamics of economic cycles. I am not even sure I mean this as a joke...

Posted by: Jean-Philippe Stijns on October 1, 2003 09:05 AM
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