NEW YORK (CNN/Money) - A closely watched measure of consumer confidence in the United States fell in December, according to a published report Friday, missing Wall Street expectations for a gain.
The University of Michigan's preliminary consumer sentiment index for December fell to 89.6 from 93.7 in November, according to market sources quoted by Reuters. Economists, on average, expected a reading of 96, according to Briefing.com.
The university's current conditions index, which measures the way consumers feel about the present state of the economy, fell to 93.6 from 102.5 in November.
The expectations index, measuring consumer's hopes for the near future, fell to 87.1 from 88.1 in November.
Still, most economists chose to dismiss the report as so much statistical noise, considering the recent gains in other measures of consumer confidence, the labor market and stock prices.
"In all of the data, the road is up, but we're going to hit a couple of speed bumps along the way," said Ken Goldstein, senior economist at the Conference Board, a private research firm that publishes its own monthly consumer confidence survey. "I'm not sure the Michigan index is reflecting anything more serious than one of those speed bumps."
The report had an immediate and negative impact on U.S. stock prices, which had been higher in earlier trading. Treasury bond prices rose, reversing earlier losses.
Wall Street pays close attention to consumers, whose spending makes up more than two-thirds of the total economy. Fueled by tax rebate checks and cash from a wave of mortgage refinancing, consumers hit the malls with gusto in the third quarter, pushing economic growth to the fastest annual pace in nearly 20 years.
But with those stimulative effects fading in the fourth quarter, most analysts have been expecting a drop-off in consumer spending, and reports of early holiday sales have not been quite as robust as many on Wall Street had hoped.
Still, non-farm payrolls have added jobs for four straight months, while the unemployment rate has declined since peaking in mid-summer, and the stock market has recovered steadily, and consumer confidence measures have recovered, as well -- making Friday's decline all the more surprising.
And consumers seldom spend the way they feel. Confidence plunged after the terror attacks of Sept. 11, 2001, but consumers still managed to make their way to auto malls and buy cars at zero-percent financing.
"For five years I worked at the [Commerce Department] and did econometric modeling, and you could never get these numbers to load into consumption numbers," said Lincoln Anderson, chief investment officer at LPL Financial Services in Boston. "They're not leading indicators or coincident indicators. They don't tell you a lot."
|
