Written by Steven Hansen
The latest Conference Board Consumer Confidence Index’s headline number declined slightly in October, after increasing sharply in September. The Index now stands at 100.9 (1985=100), down from 101.3 in September. A quote from the Conference Board: “There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high“.
Analyst Opinion of Conference Board Consumer Confidence
Consumer confidence had been steady for the previous two years – but the coronavirus killed the upswing. Consumer confidence is as low as seen in 2014.
The consensus range from Econoday was 100.0 to 103.3 (consensus 102.0). This month’s index is based on data collected through 16 October 2020.
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Per Lynn Franco, Director of Economic Indicators at The Conference Board:
Consumer confidence declined slightly in October, following a sharp improvement in September. Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs. There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high.
Caveats Relating to CB Consumer Confidence
From the Conference Board:
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90 percent of the world’s population. For more information, visit www.nielsen.com.
From Econoday:
The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income. Three thousand households across the country are surveyed each month. In general, while the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month.
Consumer confidence and retail sales generally move in tandem but not necessarily each and every month. Note that consumer assessments of employment conditions are heavily weighted in the consumer confidence index.
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