Consumer Confidence brief

Here's my shot at the Consumer Confidence Index brief. Even though I turned it in in-class today, I decided to post all my short assignments on the blog.

Consumers gain confidence, retailers doubt it

Although the Conference Board says the Consumer Confidence Index has improved in December, Sally Smith, local store owner, isn’t convinced. Even though Christmas is right around the corner, Smith says sales have been slow this year.

The index, which is based on a survey of 5,000 U.S. households, gained nearly four points between November and December. The current index is 109.0, with 1985 as the base at 100. As Lynn Franco, director of the Conference Board Consumer Research Center, explains, the Consumer Confidence Index doesn’t always portray an accurate picture of the market.

“Despite the latest improvement in the index, there is little to suggest that the pace of economic activity in the final quarter of 2006 is anything but moderately better than its uninspiring performance earlier this year,” said Franco. “Given the see-saw pattern in recent months, it is too soon to tell if this boost in confidence is a genuine signal that better times are ahead.”

Smith says that she rarely relies on indexes to predict her future business, although she reads them when they come out every month.

“I want to know what my customers are thinking, and the Consumer Confidence Index gives me a little extra insight,” said Smith. “But I don’t rely on this information to make business decisions because it seems like my customers are very fickle. For example, I haven’t really seen any increased business above the usual Christmas shoppers.”

[note: Sally Smith is made up]