Consumer Confidence Index Climbing While Stock Market Plummets
Consumer confidence and the stock market took markedly different paths Tuesday. The Consumer Confidence Index rose to a level that exceeded expectations as is it fueled by a bright outlook for employment. On the other hand, the stock market dived below 10,000 Thursday afternoon as investors cowered in fear of the European debt crisis and escalating hostilities between North and South Korea.
Resource for this article: Consumer confidence index climbing while stock market plummets
Consumer Confidence Index report
The Consumer Confidence Index report from the Conference Board, a research group based in New York, said that its Consumer Confidence Index rose to 63.3, up from a old number of 57.7 reading in April. It was expected to be 59 according to economists surveyed by Thomson Reuters. The Associated Press reports that the Conference Board Consumer Confidence Index survey — that is based on a random survey of consumers from 5,000 households between May 1 and May 18 — includes days in the stock market like the May 6 Flash Crash and European debt crisis, but it was completed before the Korean crisis and a 376-point dive on May 20, the stock market's worst one-day drop in more than a year.
Stock market ignores consumer confidence
More people are eligible for no fax payday loans for the first time in more than five years. The consumer confidence index is actually based on a sample of 5,000 US households. Tuesday's report implied this as the third consecutive increase and the highest level since March 2008. MarketWatch reports that the percentage of people who thought there would be more jobs in six months outnumbered the percentage who thought there would be fewer jobs. Meanwhile, when the latest report on the Consumer Confidence Index was released, the Dow Jones Industrial average had fallen more at least 12 percent from its recent high of 11,205, reached April 26.
Consumer Confidence Index and the data
The consumer confidence index has been getting much better ever since the record low of 25.3 in February, 20009. A reading of 90 or above indicates stability while above 100 indicates strong growth. Consumer confidence index data means a lot to economists because consumer spending accounts for 70 percent of U.S. economic activity. CNNMoney.com reports that the expectation index, which measures consumer outlook over the next few months, rose to 85.3, the highest level since August 2007, when it came in at 89.2. Last month, employers added the most jobs since March 2006, and economists expect payrolls to increase by 500,000 jobs this month, which would be the most that it has increased ever since September 1997.
The stock market consumer confidence disconnect
The consumer confidence index and the stock market are apparently don’t meet on the same level. According to MarketWatch, banks withholding credit and U.S. consumers not spending, it was the $ 800 billion government stimulus package that jump-started a return to growth in gross domestic production, jobs and more recently consumer confidence. On the stock market planet, investors, after seeing stocks plunge more than 50 percent twice in the past 10 years, are looking for other ways to make easy money.
Citations
Associated Press reports
http://www.google.com/hostednews/ap/article/ALeqM5jsIlLP-jUnVIwDKXJfeEyTrbBlmQD9FTUM100
MarketWatch reports
http://www.marketwatch.com/story/consumers-getting-more-hopeful-about-jobs-2010-05-25
CNNMoney.com reports
http://money.cnn.com/2010/05/25/news/economy/consumer_confidence/
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