US consumer confidence sharply fell in August

According to the recent consumer confidence survey in the US, the consumer confidence index has sharply fell during August compare with July’s index; this index declined during the past couple of months. The index stood in August at 44.5 (1985=100) a decrease from 59.2 in July. American consumers’ short term outlook in U.S. business conditions has sharply deteriorated according to the report. Furthermore, the consumers’ assessment of current day conditions has weakened in August. 

Please note that this report was based on a survey conducted up to August 18th. During that time, the market conditions have dramatically deteriorated with sharp falls in the stock markets that were stem, in part, by the S&P downgrade of US credit rating.  Since then however, the financial markets made a correction and bounced back from these falls and thus regained some of loses from the beginning of the month. If September won’t bring any drastic measures we might see a sharp correction in this consumer confidence survey.

Perhaps this is why the major stock market indexes started off yesterday’s business day with sharp falls, but they have soon bounced back and finished on a positive note with the S&P500 rose by 0.23%, the NASDAQ by 0.55% and the Dow by 0.18%.

This consumer confidence index might be among the reasons for the drop in natural gas prices yesterday: according to a paper by Roache et. al (2008) on the effects of news on commodities prices including natural gas prices, there was a positive significant coefficient for “consumer confidence” i.e. this news has a positive linear affect on natural gas prices. On the other hand, the paper also suggested positive significant coefficient between this news item and crude oil prices, and yet oil prices finished yesterday on a rise.

Current Nymex crude oil price, short term futures (September  2011 delivery) is traded slightly down by 0.33%, at $88.61 per barrel as of 00:57*.

Current gold price, short term futures (September  2011 delivery) is traded at $ 1,832.40 per t oz. a $2.6 increase or 0.14%, as of 00:57*.

Euros to USD is currently traded up at 1.4437 a 0.0284% decrease as of 01:08*.

(* GMT)


For more on this subject: