Read the press, and you could be forgiven for believing all is woe in the US. But take a look at the consumer confidence figures from the Conference Board, and quite a different story is told.
With markets sliding, and the sub-prime mortgage crisis threatening to overspill, US consumer confidence fell in March.
According to the Conference Board, its main index dropped to 107.2, from 111.2 in February.
This is no surprise. If US consumer confidence hadn’t fallen, then something very strange must have been going on.
Well, maybe something strange has been going on anyway.
Sure the index was down, but then February saw a five year high, and even after the big fall reported yesterday, it still stands near the top of the range seen over the last few years.
Cast your mind back to the beginning of this year. Many feared the US was in danger of hitting recession, even the optimistic were predicting a sharp slowdown, and although the sub-prime crisis had not emerged, many talked about serious problems ahead for the US housing market. Add to that the record levels of consumer and government debt, and the massive US balance of trade deficit.
Yet, what does consumer confidence do? It hits a five year high.
Then, in March, despite the market turmoil and sub-prime woes, it falls back slightly.
What was that we said earlier about a hint of madness creeping in?
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