Consumer Confidence Falls to 7½-Year Low

Consumer confidence is at a 7½ -year low, according to a Conference Board report released Tuesday.

The index stands are 82.2 after a 3.1 point-drop in November. Any number below 100 indicates general pessimism about the economy, over 100 shows optimism.

Consumer confidence is a good prognosticator of consumer spending. When people feel better about the economy, they are more likely to spend money and purchase goods. More consumer activity boosts demand for trucking services by forcing companies to re-order goods to replenish inventories.

However, signals were mixed, as the National Association of Realtors said sales of pre-existing homes jumped 5.5% in October, to an annual rate of 5.17 million homes. That figure, said the NAR, is 2% above the 5.07-million unit pace in October 2000.

Pre-owned home sales are an important figure to watch for the trucking industry. About 85% of all homes sold in the U.S. are previously owned and when sales are good, the demand for dry van trucks to move families in or out of houses can increase.

The Conference Board’s report clouded the issue of consumer confidence by contradicting a University of Michigan report, released nearly a week ago, which showed a consumer sentiment index to be rising.

Analysts expected the Conference Board’s figure to rise as well, Bloomberg reported.

The Conference Board’s report was not all bad news, as the consumer expectation index rose 3.9 points to 74.6, indicating that the average consumer feels the economy will be better six months from now.

Since 1985, the Conference Board has been tracking consumer confidence in the economy.

The rebound in sales of previously owned homes cames after an 11.6% plunge in September when the terrorist attacks made consumers wary of making big-ticket purchases, the Associated Press reported.

Click here for a press release from the Conference Board.)

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