The Conference Board Consumer Confidence Index improves in December.
The Conference Board Consumer Confidence Index, which had rebounded in November, improved further in December. The Index now stands at 103.6 (1985=100), up from 98.3 in November. The Present Situation Index surged to 121.5 from 113.2. The Expectations Index increased to 91.6 from 88.4 last month.
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"Consumer confidence continues to bounce back and is now at its highest level since Hurricane Katrina struck the Gulf Coast," says Lynn Franco, Director of The Conference Board Consumer Research Center. "The resiliency of the economy, recent declines in prices at the pump, and job growth have consumers feeling more confident at year-end than they felt at the start of 2005. Even though all of the improvement over the past twelve months has been in consumers' assessment of current conditions, and expectations remain below earlier levels, consumers are confident that the economy will continue to expand in 2006."
Taking this survey simply at face value, this information bodes well for the markets.
Meanwhile at the Mortgage Bankers Association Loan Application Survey, the results did not seem nearly so optimistic.
WASHINGTON, D.C. (December 28, 2005) The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 23. The Market Composite Index - a measure of mortgage loan application volume was 554.1 -- a decrease of 6.8 percent on a seasonally adjusted basis from 594.6 one week earlier. A holiday adjustment was included in the seasonally adjusted numbers to help account for the reduced application activity prior to the holiday weekend. On an unadjusted basis, the Index decreased 17.0 percent compared with the previous week and was up 3.1 percent compared with the same week one year earlier.
I cannot help but wonder how the confidence level will fair once the housing ATM is no longer able to dispense fistfuls of cash. As interest rates rise, housing activity slows. And as we know, many people refinanced their homes to support their lifestyle. I am curious to see how this plays out in 2006.
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