by Calculated Risk on 2/24/2009 06:23:00 PM

I don't follow consumer confidence very closely because it is a conincident indicator; it tells us what we already know. But with the record low reading today, here are some comments from Asha Bangalore at Northern Trust:

The Conference Board’s Consumer Confidence Index plunged to 25.0 in February vs. 37.4 in January. This is a new record low for the series which dates back to February 1967. The two subcomponents -- Present Situation Index (21.2 vs. 39.7 in January) and the Expectations Index (27.5 vs. 42.5 in January) -- declined in January. The dire economic news in the media nearly every day is bound to be reflected in the consumers’ evaluation of the economy.

Click on graph for larger image in new window.

This graph shows the overall consumer confidence index from the Conference Board (graph from Northern Trust).

The Present Situation Index (not shown) is low, but not as low as in some earlier recessions (the Present Situation Index is at 21.2, it fell to 16.2 in 1982). What pulled down the overall index was that the Expectations Index was at an all time low. People are really concerned about the future.

More from Bangalore:

The index measuring if jobs are hard to find advanced (47.8 vs. 41.1 in January) and the index tracking whether jobs are plentiful fell (4.4 vs. 7.1 in January). The gap between the two indexes was wider in February vs. January (see chart 8), which is indicative of another grim employment report.

The employment situation remains grim.

A couple of other notes: those making over over $50,000 per year are now as pessimistic as everyone else - that is pretty unusual - and inflation expectations have increased (something the Fed wants a little of - but not too much).

This really tells us that the economic news is depressing - something we already know.