By: Jeffrey Klein, Political Buzz Examiner
The “Consumer Confidence Index (CCI)” is, perhaps, one the most telling leading indicators of consumer sentiment–particularly as 70% of the U.S. economy is driven by consumer consumption of goods and services.
The report is issued monthly by “The Conference Board,” which is an independent economic research organization that surveys 5,000 households to establish the “reading.”
And the number for December is nothing less than breath-taking, coming in at 64.5, much higher than the expected 58.0–a leap up from November’s downwardly revised 55.2, according to a Reuters’ article today.
However, the most important illustration comes from examining a graph representing historical CCI data, which is “benchmarked” at a value of 100.0 = 1985.
It clearly shows that in January 2007, when Democrats took control of the Congress after the midterm 2006 elections, the index began a precipitous plunge, from a value of about 110.0, where it had averaged since December 2001, just prior to President George Bush being inaugurated, down to about 38.0 in January 2009, when Barack Obama was inaugurated. From there the value dropped to about 25.0 by May 2009, then recovering somewhat to hover in a small range averaging 53.0, throughout the Obama presidency.
As the CCI is what is known as a “lagging” indicator, it would seem that it is reflecting a marked uptick in consumer’s view of the future–simultaneously with definitive start of the Republican Presidential Primary race–beginning the march toward the November 2012 elections.
As there still remains a “divided” government in Washington, D.C., and negative news arriving daily that stems from President Obama’s “leading from behind” strategy, the only proper interpretation of this strong rise is that consumers can now “feel” that the end is near, for the socialist-leaning President Obama and his liberal Democrat party.
Copyright (c) 2011 by Jeffrey Klein