Consumer confidence up again in '98
By DARYL DELANO -- Industrial Distribution, 3/1/1999
American consumers were somewhat more confident at the beginning of 1998 than they were as the year drew to a close, although hardly "down in the dumps". Home purchases -- the ultimate "big ticket" item for virtually all Americans -- is the consumer behavior most frequently tied to the relative optimism or pessimism of the populace. Confidence levels are often also closely correlated with consumer spending for appliances and home remodeling work.The Conference Board's composite Consumer Confidence Index dipped slightly during the final month of 1998, falling to a reading of 126.1 (1985=100) in December from November's 126.4 level. The CCI had risen to a 30-year high of 138.2 during June of last year, but was moderately weaker during the second half of 1998. The December 1998 reading was 7.4% lower than the CCI recorded in the final month of 1997.
It's remarkable that consumer confidence held up as well as it did during 1998. Americans had to deal with the impeachment of a President, a renewed military operation in Iraq, and the most turbulent period in global financial markets during the past half-century. And yet the CCI for the year as a whole -- on an annual average basis -- was 131.6, 5% higher than the 1997 average.
Although the CCI ended the year lower in December, the annual average was the highest recorded since the late 1960s.
Following the modest downturn trend established during the final quarter of 1998, we expect that overall confidence will be lower this year than last year. American consumers themselves seem to suspect that the best days of this economic expansion are behind them.
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