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Suffice to say, it would be very difficult for someone to convince me that we have not seen the low in intermediate term US Consumer confidence. A more interesting question is whether or not the final April reading will end up flashing a higher high for 2009 to-date versus the preliminary reading that we saw back in January. Clearly, the January preliminary reading was an early head-fake.

Ironically enough, this morning’s University Michigan Consumer Confidence Report (the preliminary, not final April reading) was dead in line with the preliminary January reading of 61.9 (see chart). What’s most interesting about this is that last time the intermediate short squeeze (November to January) ended, US Consumer Confidence locked in a short term peak, then fell right back down to new lows.

As the stock market goes from here, so will the direction of this chart (see below). On the asset side to the consumer’s confidence reading, two things really matter: 1. Home Prices and 2. Stock Prices.

The Depressionistas will remind you of everything that they have been saying for the last 6 weeks and that we’re “overbought.” Meanwhile the consumer analysts will tell you that virtually all of the things that matter to consumer spending from the aforementioned, to employment, to gas prices, and mortgage rates, have improved, materially, in the last 3 months.

Don’t forget that employment losses continued to sequentially accelerate into late February, early March. As of the last 2 weeks of jobless claims, that very relevant (negative) US Consumer headwind has found a positive delta.


Keith R. McCullough
Chief Executive Officer

US Consumer: Is it January or April? - senti