Deller's two cents: What a wild year but it ends with positive news. The only odd piece of news in the dip in the consumer confidence index. Why, who knows, but keep in mind the general rule is it takes an indicator moving in the same direction three periods in a row before one can say a trend is in place.
Economic Week in Review: Stocks post double-digit gains in 2010
December 31, 2010
Economic news was light this week, as 2010 came to a close. Consumer confidence was down for the month of December amid rising concerns over the future state of the job market. For the week ended December 31, the S&P 500 Index rose 0.1% to 1,257 (for a year-to-date total return of about 15%). The yield of the 10-year U.S. Treasury note fell 12 basis points to 3.29% (for a year-to-date decrease of 56 points).
Consumer confidence dwindles
The Conference Board's index of consumer confidence dropped unexpectedly in December to 52.5, down from 54.3 in November. Economists had expected an increase in confidence for the month, since the survey was conducted after Congress voted to extend the Bush-era tax cuts.
Consumers' views on their present economic situation and their expectations six months from now both declined slightly. Still, the biggest concern for consumers was the job market-the survey showed an increase in the number of consumers who believe that jobs are hard to get and who think there will be even fewer jobs six months from now.
"Consumers' assessment of the current state of the economy and labor market remains tepid, and their outlook remains cautious," said Lynn Franco, director of the Conference Board's consumer research center. "Thus, all signs continue to suggest that the economic expansion will continue well into 2011, but that the pace of growth will remain moderate."
Despite the drop in December, consumer confidence is still on par with the confidence levels of a year ago.
The economic week ahead
Friday's release of the Labor Department's monthly assessment of the employment situation will be next week's big news. Other news will include the latest on the Institute for Supply Management (ISM) Manufacturing Index, construction spending (Monday), factory orders, FOMC minutes (Tuesday), ISM Non-Manufacturing Index (Wednesday), and consumer credit (Friday).
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Steven C. Deller
Professor and Community Development Economist
Department of Agricultural and Applied Economics
515 Taylor Hall --- 427 Lorch Street
University of Wisconsin-Madison/Extension
Madison, WI 53706
608-263-6251
"I started out with nothing and I have most of it left."
Seasick Steve
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