Consumers seem awfully confident these days. Even in Europe the confidence numbers are down, but not out. It is rather remarkable that with all of the news that points to problems in Europe and Asia that there is still such a high level (the highest in years in fact) shown through the current conditions index of the UMich.
Is the jobs situation better? Wages up? Price at the pump down? Food cost down? Markets on fire? Political happiness? Confidence in Congress?
From where we sit, NO to all of the above.
So what is it then? Maybe consumers are just getting the signal that no matter what, governments will have their backs (and wallets) protected.
Looking at the trend, the current conditions are moving nicely higher since the summer. However there are some obvious concerns with the outlook. Probably the fiscal cliff discussion and coming elections is not providing too much comfort.
There is also an interesting divergence between the two most often reported confidence indices.
The Conference Board overall confidence levels are rolling over while UMich is trending higher. Perhaps it is just the timing of the releases. We shall see more next month and the outcome (if it ever does come) of the EuroZone debacle will surely play a big role.
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