Thursday, September 1, 2011

Thoughts on the Consumer Confidence Index

Christopher Ramey
The Conference Board publishes the widely reported "Consumer Confidence Index" every month.  It is often an accurate predictor of floor covering and home furnishings sales. 

What isn't widely known is that the report can be dissected into a "Present Situation Index" as well as an "Expectations Index."  For business owners the former is more relevant because Americans are historically an optimistic lot.

Today’s press release from The Conference Board reads: “The Conference Board Consumer Confidence Index®, which had improved slightly in July, plummeted in August. The Index now stands at 44.5 (1985=100), down from 59.2 in July. The Present Situation Index decreased to 33.3 from 35.7. The Expectations Index decreased to 51.9 from 74.9 last month.  Today’s data on August reflects the fifth consecutive decrease for Present Situation Index.”       

Despite their falling confidence in the present situation, Americans are still spending money in some sectors.  In fact, Americans have acquired half a million luxury cars year to date.  Perhaps a poor economy and a collective bad mood aren't always to blame for lackluster sales.  What can the floor covering industry do to parrot the car industry and break-away from the housing industry doldrums?

I look forward to your thoughts.  Chris

Adopted from the Ramey Report, August 2011 

Chris Ramey is president of Affluent Insights and a member of the Floor Covering Institute.

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