The Conference board reported that consumer confidence in January dropped to lowest level since Nov. 2011. I find this interesting in light of the stock market nearing its all time high (S&P high was 1576 in 2007). Also in light of the rising retail sales numbers. Maybe fear brings about escape through spending. The stock market is up because the Fed keeps pumping cash into the system and keeps interest rates near zero. Also because there seems to be that bubble mentality brewing.
Look how the stock market used to move in tandem with confidence and how its now diverging dramatically.
Next look at how retail sales are strong yet confidence is weak. The sales figure, however, lags the confidence I believe.
And lastly here you can can see the historic consumer confidence levels for the past 6 years. The top part of the graph is actual CC numbers and the bottom shows rate of change. Now it has obviously turned negative and is accelerating to the downside in velocity but will it really plunge or bounce up from here? Who knows, but it will be interesting to see if next month shows a trend. Also there are several measures of this, we have to see if they all confirm.
The Univ. of Michigan consumer confidence came in at 73.8 up from 72.9 in Dec. so go figure… Amazing how these different polls vary and who knows which one to trust. Also today, the unemployment rate rose to 7.9% but more importantly only 157,000 jobs added which is pretty weak. On the other hand the total added jobs for 2012 was increased up 335,000