Consumer Confidence High in US Low in UK

Recent studies on US consumer confidence show positive signs for US economic recovery, while a UK study shows consumer confidence at a 12 month low.

Did anyone notice that there were two news stories on consumer confidence today? One headline read “US consumer confidence hits 16-month high.” This headline was driven by a ABC News consumer confidence survey based on a sample of about 1,000 interviews conducted in the four weeks ending January 3rd.

One of the measurements in the ABC News consumer confidence study is referred to as the consumer comfort index, currently at -41. While this is the highest measurement of this index in 16 months, it is still well off the 24 year average of -12. The consumer comfort index is measured on a scale of -100 to +100.

Another headline today read “Consumer confidence suffered its sharpest fall in over a year in December” coming out of Reuters London. It appears that some recently announced changes in VAT and other taxes possibly has UK consumers a bit worried or their economic future.

A few weeks back, on December 29th, the Wall Street Journal headline read “The Conference Board, a private research group, said its index of consumer confidence increased to 52.9 this month, from a revised 50.6 in November.” This seems like “directionally” good news for US consumer confidence and hence, anticipated consumer spending in 2010.

While consumer confidence and other economic indicators show signs of consumer optimism, consumers are shopping smarter ensuring that most value for every dollar spent. Since roughly two thirds of the economy is driving by consumer spending, businesses are paying close attention to these key economic indicators such as consumer confidence as they finalize their marketing plans for Q1 2010.