Adam G.

York, Economist
adam.york@wachovia.com ● 704-715-9660

April 28, 2009

Consumer Confidence Slowly Returning

Confidence jumped up to 39.2 in April, the highest reading since November. The increase was driven primarily by an
outsized gain in expectations—up almost twenty points on the month. The labor differential narrowed for the first
time in three months, corroborating the view that the pace of decline in the labor market may be slowing.
Confidence Increases as Expectations Jump Labor Market Show Very Tentative Signs of Turning
• Confidence moved sharply higher in April, led by the biggest • The labor differential, the difference between those who find
jump in expectations since 2003. Consumers appear to be jobs “plentiful” and those who find them “hard to get,”
feeling better about the outlook for the U.S. economy. improved for the 1st time in three months and only the 2nd time
• While we do not expect consumer spending to come roaring in more than a year. Still, conditions in the labor market remain
back over the next few months, the worst of the declines may tough as only 4.5 percent of consumers reported jobs were
be over. We expect small gains in real consumption will be plentiful. While we do not expect gains in employment to
the norm for the rest of the year. return until 2010, the worst of the declines may be behind us.

Consumer Confidence Index Jobs Plentiful vs. Hard to Get

Conference Board Percent of Consumers, Conference Board
160 160 60% 60%
Jobs Hard to Get: Apr @ 47.9%
Jobs Plentiful: Apr @ 4.5%
140 140
50% 50%

120 120
40% 40%

100 100
30% 30%
80 80

20% 20%
60 60

10% 10%
40 Confidence Yr/Yr % Chg: Apr @ -37.6% 40
Confidence: Apr @ 39.2
12-Month Moving Average: Apr @ 44.3
20 20 0% 0%
87 89 91 93 95 97 99 01 03 05 07 09 87 89 91 93 95 97 99 01 03 05 07 09

Conference Board Consumer Confidence Consumer Confidence vs. Layoffs

Present Situation and Expectations Index Conference Board, Initial Jobless Claims, In Thousands
200 200 160 700

175 175 140

600
150 150
120

125 125
500
100
100 100
80
400
75 75

60
50 50
300
Expectations Yr/Yr % Chg.: Apr @ -1.1%
25 Present Situation Yr/Yr % Chg.: Apr @ -71.0% 25 40
Confidence: Apr @ 39.2 (Left Axis)
Present Situation: Apr @ 23.7
Expectations: Apr @ 49.5 Initial Jobless Claims: Apr @ 637.7 Thousand (Right Axis)
0 0 20 200
87 89 91 93 95 97 99 01 03 05 07 09 87 89 91 93 95 97 99 01 03 05 07 09

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