The Downs and Even-More-Downs of Consumer Confidence

Was consumer confidence rising or falling last month? Depends on who you ask. The Reuters/University of Michigan Surveys of Consumers found a slight uptick in January vs. the previous month (to 78.4 from 75.5), even though the number was far below that of January 2007 (96.9). Meanwhile, polling by Gallup found consumer confidence going from bad to worse. Though Gallup found an upward blip in confidence at the very beginning of January, this had been reversed by the time the month limped to an end. In polling fielded in the first week of January, 31 percent of adults rated the economy “excellent” or “good” and 24 percent called it “poor.” By the end of the month, the “excellent/good” total had dwindled to 24 percent and the “poor” vote had climbed to 33 percent. (Most of the other respondents rated the economy as “only fair.”) The decline wasn’t confined to the lower end of the income scale, Gallup notes. Among people in the $90,000-plus bracket, 24 percent rated the economy as poor at the end of the month, up from 17 percent at the beginning of the month. This lends support to a growing fear that up-market consumers won’t keep spending freely if the economy further weakens, notwithstanding conventional wisdom that they’re not especially vulnerable to a recession.