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Highlights Market Consensus before announcementConsumer Confidence Released on 1/31/2012 10:00:00 AM For Jan, 2012 Prior Prior Revised Consensus Consensus Range Actual Consumer Confidence - Level 64.5 64.8 68.0 59.0 to 65.5 61.1
Weakness in the assessment of current conditions -- likely reflecting rising gas prices and perhaps a more difficult jobs market -- pulled down consumer confidence this month to 61.1 from December's revised 64.8. The report's present situation component fell more than 8 points to 38.4 in what nearly erases December's strong showing. Weakness here is centered unfortunately in the jobs market where 43.5 percent say jobs are hard to get. This is not a good indication for Friday's employment report and compares with the recovery low of 41.6 percent in December.
The expectations component also slipped but just barely, to 76.2 vs 77.0. The job readings on the expectations side showing rising optimism that contrasts with the current assessment of the jobs market. This suggests that consumers think current troubles will be temporary. Still, consumers see their income power falling in the months ahead which is a negative for the consumer spending outlook.
Gas prices likely have much to do with income expectations and they certainly affect inflation expectations which are up 2 tenths this month to plus 5.5 percent for the one-year outlook. This report hints at trouble for January suggesting the month may prove to be a weak one in what is otherwise a rising trend for the economy. The Dow is moving further off opening highs following this report.
The Conference Board's consumer confidence index in December posted a solid 9.3 point rise to 64.5 for the best reading in eight months. The consumer view of the jobs situation clearly is improving, although slowly. Those saying jobs are currently hard to get were down to 41.8 percent from 43.0 percent in November for the lowest level of the recovery. And for the first time since April, there were more optimists, 17.1 percent, than pessimists, 14.4 percent, when it comes to their own income outlook.Definition
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. Why Investors Care
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Highlights Market Consensus before announcementChicago PMI Released on 1/31/2012 9:45:00 AM For Jan, 2012 Prior Consensus Consensus Range Actual Business Barometer Index - Level 62.5 63.0 59.0 to 65.5 60.2
Slowing at a still high rate of expansion is the call on overall business conditions in the Chicago area. The Chicago composite index eased 2 points this month to 60.2 (prior revised), well over 50 to indicate strong growth in year-on-year business activity though slightly below December to indicate a slightly slower rate of growth. The new orders index is the most important component and it tells the same story, at 63.6 this month vs December's 67.1. In the report's biggest sign of trouble, the level of backlogs is down 9 points, to a sub-50 level of 48.3 to indicate a monthly draw.
The report's sample, which in distinction to regional manufacturing reports is drawn from all areas of the economy, also reports the lowest rate of employment expansion in five months which is not a positive indication for Friday's employment report. But other readings point to strength including a steady and strong rate of production, a steady rate of input price pressure, and further slowing in deliveries which points to congestion in the supply chain.
This report has been uniformly and strongly positive this recovery, but not this month. Today's report hints at the risk of slowing for both of this week's ISM reports. The Dow is down from opening highs.
The Chicago PMI for December was little changed at a very strong 62.5 versus 65.2 the month before. Strength was led by the new orders index which posted at a healthy 68.0 compared to 70.2 the prior month.
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Highlights Market Consensus before announcementS&P Case-Shiller HPI Released on 1/31/2012 9:00:00 AM For Nov, 2011 Prior Prior Revised Consensus Consensus Range Actual 20-city, SA - M/M -0.6 % -0.7 % -0.4 % -1.1 % to 0.0 % -0.7 % 20-city, NSA - M/M -1.2 % -1.3 % -1.3 % 20-city, NSA - Yr/Yr -3.4 % -3.7 %
Home prices are continuing to erode with no meaningful signs of a turnaround in the offing. This is the conclusion of the Case-Shiller report where in November, for the third straight month, the composite-20 index fell a sizable 0.7 percent (October revised). All but 3 of the 20 cities show monthly contraction. The year-on-year rate of contraction for the composite-20 deepened slightly to minus 3.7 percent from minus 3.4 percent.
Unadjusted data are focused on in this report and tell a story of greater monthly weakness, greater weakness tied to weather effects. The unadjusted composite-20 index is down 1.3 percent for a second straight month (October revised) with 19 of 20 cities showing declines. Year-on-year, the unadjusted rates in November and October are the same as the adjusted rates.
Falling prices are a major factor that's helping to lift housing sales from depressed levels. But at the same time, lower prices are a major negative for existing home owners, trapping many with negative equity and limiting resale options.
The S&P/Case-Shiller 20-city home price index (SA) fell 0.6 percent in October following a revised 0.7 percent decline in September and a 0.4 percent decline in August. on an unadjusted basis, contraction steepened from a revised 0.7 percent in September to 1.2 percent in October. The deeper monthly contraction here likely reflects, at least in part, the dampening effects on demand from seasonally colder weather. In some parts of the U.S., atypically early snow storms in October likely hurt demand.
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