From a variety of sources....
The Conference Board's Consumer Confidence Index, which had declined in October, posted another loss in November. The Index now stands at 90.5 (1985=100), down from 92.9 in October. The Expectations Index declined to 87.4 from 92.2. The Present Situation Index edged up to 95.2 from 94.0.
Real gross domestic product -- the output of goods and services produced by labor and property
located in the United States -- increased at an annual rate of 3.9 percent in the third quarter of 2004, according to preliminary estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.3 percent.
This is the fourth monthly drop in a row for consumer confidence. The stock market dropped 20 points after the number's release, indicating traders were less then thrilled. On top of that, the initial retail numbers for the Christmas season are fair. Wal-Mart same store sales dropped a little over 1% in November. Other anecdotal information from retailers indicates Friday was a big day, but the weekend sales did not follow through. This shouldn't be a huge concern, as most retailers start to heavily discount in the weeks before Christmas.
Also of note with the consumer confidence numbers is oil. I have seen conflicting ideas on the relationship between oil and consumer confidence. Some commentators have stated consumers have already priced oil into their expectations, while other commentators have noted a spike in oil could send consumers into a more bearish trend.
The GDP number was strong, although there are some concerns from the number's internals. First, consumer spending increased 4% in the quarter, accounting for part of GDP's increase. If the consumer confidence numbers continued to fall, it seems logical that consumer spending will also decrease. In addition, corporate profits decreased largely as a result of the Florida hurricanes.
Disposable personal incomes increased an upwardly revised 2 percent, while the personal savings rate dropped to 0.5 percent, matching the lowest since the Great Depression.
This low savings rate is terrible and may have some very bad implications for the future. If the economy starts to drap, the American consumer could lose everything very quickly.
Finally, the low dollar has yet to make a meaningful impact on the trade deficit. Exports of U.S.-made goods and services increased 6.3 percent, the slowest increase in five quarters. Imports grew even slower, rising 6 percent. Exports increased a mere .3% over imports for the last quarter.
http://cbs.marketwatch.com/news/story.asp?guid=%7B7291C23C%2D0AFC%2D4177%2D91A0%2D9C9181D32E28%7D&am
p;siteid=mktw&dist=
http://www.conference-board.org/economics/consumerConfidence.cfm
http://news.morningstar.com/news/DJ/M11/D30/200411301102DOWJONESDJONLINE000561.html
http://www.bea.doc.gov/bea/newsrel/gdpnewsrelease.htm