Monday Moneybeat: Record-high consumer confidence

MARY REICHARD, HOST: Coming next on The World and Everything in It, the Monday Moneybeat.

NICK EICHER, HOST: Well, even if the Western world cheered the death of a terrorist mastermind, it was a cause for concern on Wall Street, at least the prospect that Iran wouldn’t let it go by without retaliation. The stock market snapped a five-week winning streak for the Standard & Poor’s 500, with losses on Friday wiping out another holiday-shortened week’s worth of gains—just 24 hours after all the major indexes once again hit new record highs.

The price of oil shot up more than 3 percent on Friday, driven by concern about a disruption in global supply if a new war should break out. Another concern is the likelihood of a cyber terror attack. Back in 2012 and 2013, after the United States sanctioned Iran, Iranian hackers launched denial-of-service attacks that shut down financial websites, including Bank of America, the New York Stock Exchange, and the Nasdaq.

REICHARD: Consumer confidence remains at historic high levels. But it did slip back a bit in December, according to an index by the economic think tank The Conference Board. Confidence dropped slightly in December two-tenths of a percent, to 126.5 from 126.8. 

So what does that really mean? Here’s a baseline. The index goes back to 1967, and it hit an even “100” in the year 1985, the year President Reagan was beginning his second term. So any number above 100 is better than Reagan and below that, of course, worse. 

For comparison, the highest consumer confidence measured was 144.7, right at about the end of the Clinton presidency. The lowest was after the financial crisis of 2007 when consumer confidence hit just 25.3.

So that puts December’s 126.5 in context.

EICHER: Here are reports from three key sectors in the economy: car sales, down a little bit; home sales, up a lot; and manufacturing, way down, about as bad now as it was in June 2009, around the depth of the financial crisis and recession.

First, the auto industry. It recorded a little more than 1 percent fewer sales in 2019 than the previous year, but unit sales did exceed 17 million vehicles.

REICHARD: On home sales: The National Association of Realtors measure of purchase-contracts-signed went up more than 1 percent in November. Year-on-year, home sales are up almost 7-and-a-half percent.

Also, new building permits hit the highest level in more than a decade. That’s a sign the building boom will continue into 2020.

EICHER: We’ll end on a downer, manufacturing: The Institute for Supply Management manufacturing index was at just a little over 47 for December, down from more than 48 November. That December figure is the lowest since June 2009. 

A 50 on that index is the dividing line: above it indicates manufacturing growth and below it indicates contraction. Manufacturing has been in contraction since August. The weak global economy and trade disputes have had a big negative effect.

And that is today’s Monday Moneybeat.

(AP Photo/Mary Altaffer) The Wall St. street sign is framed by American flags flying outside the New York Stock Exchange, Friday, Jan. 3, 2020, in New York. 

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