It’s been about six months since we visited the subject of consumer confidence, and with the most recent data having been released this week, I thought it might be a good time to post an updated version of my interactive chart. You can drag the time sliders below the chart to view data going all the way back to 1998.
As I have mentioned before, consumer confidence is tied pretty closely to residential real estate, and as long as confidence remains in the gutter, we won’t be seeing a recovery in real estate.
After dropping below 30 in January 2009, the present situation index spent two full years below 30. Prior to this slump, the lowest the present situation index had ever been was 59.7 in September 2003, which was the last month of a 7-month trough. In January this year the present situation index finally made it back above 30, and although it has slumped a bit in the last few months, the current level of 37.6 is definitely a better place than during the worst of the crash.
I have been saying it for a while, but it’s worth repeating that I still think we’re in for a very long, drawn out, Japan-style economic slog over the next decade or so, so I expect that like home prices, we’ll see consumer confidence bounce along the bottom for some time to come.