Consumer confidence up? Sorry, it's not

And here's why . . .

By David Blanchflower Published 30 September 2011 10:45

Many newspapers are carrying the story that the GFK NOP consumer confidence improved between August and September, although apparently not significantly so. It seems that UK consumers became more optimistic about the economic outlook and spending; GFK NOP apparently reported that their index of sentiment gained 1 point from August to minus 30. Sorry, it didn't.

This presents data watchers like this correspondent with a puzzle, because, on the same day, the EU Commission reported the results of the same survey. (Note that the GFK conducts the survey for the EU, which pays for it.) And the answers are completely different.

This is where the puzzle really starts, because on its website yesterday, the commission argued that the survey of consumer confidence, using the same data actually fell in September, to its lowest level since April. You can take a look here and even download the data as an Excel file across all the EU countries here.

A decline does seem rather more likely than a rise, given that answers to seven questions show that confidence worsened between August and September. So surely it's going to be pretty hard to get the survey to improve?

The EU calculates its index as (Q2+Q4-Q7+Q11)/4. Note, of course, that a higher number to Question 7 is bad. So consumer confidence fell between August and September from -20 to -22. It looks pretty hard to get a positive from 12 numbers when seven of them worsen and two show no change.

Also the overall index that the EU publishes, which is a combination of business and consumer confidence, worsened sharply to 89.5, down from 92.9, which is its lowest level since September 2009.

Up or down? Which is it? GFK and the EU had better sort this one out. It makes little sense to produce estimates that go in different directions from the same bloody survey. It looks very much to me that consumer confidence worsened in September, not improved. Somebody at GFK has a bit of explaining to do!

More from David Blanchflower

38 comments

Thu, 2011-10-06 11:32 — Boomandbuster (not verified)

@matty

YOU'RE just sallivating as usual. we can all be a genius after the event but every credible forecaster was predicting higher growth globally than has occurred across every western economy. just go take a look at the IMF forecasts they have all been dwongraded too, for the US, germany, france, japan.

you really don't get it WE ARE in a global crisis that isn't remotely near over. growth has slowed across every western economy do you imagine this wouldn't have happened in the UK if GB was still at the tiller? I'm afraid the solution to this isn't more bloated government, more unfunded promises, more borrowing from our children, more off balance sheet debt, more 8% pfi when you can borrow at 4%. The answer is to look at the success stories like singapore (where I live, expat)/hong kong where they've rejected the soggy socialism you cheer lead for and have faith in markets and personal freedom. Globalisation has killed socialism stone dead, though as we see in Greece people aren't ready to accept it. you and you're nasty little left elite clique will moan and complain whilst clinging to your damnable philosophy but it's over I'm afraid. before you respond have a quick thing why the gdp per capita in the country i live in is 25% higher than in your country, how this has been achieved in such a short time and how its been achieved without massive state intervention at every turn.

Sun, 2011-10-02 17:43 — Hitesh Damani (not verified)

There have to be structural changes which follow a downturn as this one and reminiscent to the 1930's.
No amount of monetary policy engineering is going to reduce the mountain of debt accumulated during the boom times,as the actions would not have differed, even if a conservative govt. would have been in power.

The only solution so far coming out is for the dollar to strengthen,deflation to rear its ugly head and a painful readjustment to follow.

Debt deflation will bring about hyperinflation and provide further readjustment to living standards across the world.A stronger dollar in contrast will bring about deflation and there are no half way measures.

Its better that the dollar retains its reserve status during these times otherwise a void will appear in the balance of power and wont be pleasing for the world to see.

Tue, 2011-10-04 11:03 — Awake!

Boomand buster
do u think matt is real? He maybe a construct by NS staff to 'stir it up'. It's not possible to be that 'uanaware'. Even when he heckles he contradicts himself...

Wed, 2011-10-05 13:31 — matthew fox (not verified)

Sorry Indu, I must apologise, I thought your name was a recurring spell mistake, I mean, your spelling is as a good as the OBR's economic forecasting.

Wed, 2011-10-05 13:33 — matthew fox (not verified)

Hark at me, I should have composed
" Recurring Spelling "

Have you got around to finding that article(s) showing Lagarde and the credit rating agencies attacking public sector pensions.

Ps I am aware Lagarde is a female, just for the record, the name Christine fills in all the blanks.

Sat, 2011-10-01 02:10 — Indu Pendent (not verified)

This cloud has a solver lining.

Low consumer confidence mean people are spending less on imports and paying off their debts instead - i.e. it is painful for people in the short to medium term but good for the country in the long run.

Low confidence will keep wage rises subdued which is steadily mending the economic - things got so far out of control in the last decade it will take the next decade to put them right.

Wed, 2011-10-05 13:57 — Dave C (not verified)

Indu,

I thought the Hindu moon deity Chandra / Rajanipati / Kshuparaka / Soma / Indu was a bloke so I assumed you were too.

Tue, 2011-10-04 13:59 — matthew fox (not verified)

It must be a full moon, I can hear a chorus of crackpots.

Criticism from Indu Pendent, the imbecile who declared Osborne only borrowed £100 Billion in his first year, I mean he was only £50 billion out.

And don't forget, he talks about Lagarde and the credit rating agencies attacking public sector pensions, yet spurn opportunity after oppportunity to provide the evidence.

I don't need Indu Pendent's geographical location to know, he is on the wrong side of the truth.

Sun, 2011-10-02 23:29 — Indu Pendent (not verified)

@matt

Foxy, its pretty obvious who you are - you are the villiage idiot.

As other people have pointed out to you often, you consistently fail to grasp the basics of people's posts (1%).

Labour left an almighty mess. We have massive borrowing, the biggest peace time structural deficit , an imbalanced economy, a decayed sociey to name just a few of the legacy. Labours solution is not credible (according to Alistair) - it would be too little too late. Its does not take a genius to realise what the last government did but it passes over your head.

Its odd that you will criticise the coalition for cutting the deficit too fast and also criticise them for not cutting the deficit fast enough - are you the idiot who writes Hatties 'talking out of both sides of her mouth' speaches?

You have not answered my question - should borrowing be increased or decreased? Dont you understand the question or are you incapable of thinking an answer for yourself?

Wed, 2011-10-05 15:36 — Indu Pendent (not verified)

http://www.behindthename.com/name/indu

I'm focus on the issues I feel strongly about ... corruption, the next generation, opportunities for people who want them, free loaders, abusive self interests, greedy selfish lazy people etc.

Wed, 2011-10-05 16:19 — Boomandbuster (not verified)

ironic matty pokes fun at the OBR his labour weren't exactly opposed to optimistic growth forecasts themselves. people is glass houses and all that..........though mr ballsup seemed to be praising the obr and wanted to go further with new "tough fiscal rules" at the lp conference. I wonder if they'll last as long as the golden rules, 40% national debt anyone and uniquely in economics the claim he'd ended the trade cycle, what happened to that?

Sat, 2011-10-01 12:05 — swatantra nandanwar

Its tough with food heating and petrol all up people are not in the mood to spend. So the ordinary prudent consumer is going to save their cash and forgo the luxuries. Itsonly the more wealthy amobngst us who can spend as though there were no recession because it'll hardly make a dent in their wallet and they won't even notice it. However they will notice a Tobin Tax or a Wealth Tax.

Wed, 2011-10-05 17:39 — matthew fox (not verified)

People with glass arguments shouldn't throw stones broomandmuster.

The OBR are like the Conservative movement, way off the mark.

The OBR was suppose non-political, but all we are getting is submissiveness.

According to the OBR, there was an estimated 20,000 public sector job losses this year. Would you like to know the true figure?

Is Indoo esperanto of wally brain?

Sat, 2011-10-01 16:22 — matthew fox (not verified)

According to the FSB, they don't see any silver linings, far from it.

Yesterday, the Federation of Small Businesses, released a statement, declaring Osborne as being " Out of Touch "

Fri, 2011-09-30 11:28 — asdasd (not verified)

Alternatively, is a survey estimated with error, and these changes are just due to sampling variability.

GFK state:

"The figures contained within the Consumer Confidence Barometer have an estimated margin of error of +/-2%."

Which isn't really enough information to judge whether these month on month changes mean anything.

I suspect that if they published the standard deviations, (or better yet confidence intervals) of each of the measures we would find that these month-on-month changes were consistent with sampling variability.

It would be more accurate to say there is little evidence that any of these measure have changed month on month.

But as it is, GfK don't publish the standard deviations or confidence intervals so we can say very little about whether these changes are meaningful.

A similar critique can be leveled at the LFS, see Ben Goldacre:

http://www.guardian.co.uk/commentisfree/2011/aug/19/bad-science-unemploy...

Wed, 2011-10-05 19:06 — mike555

I like the way Matt pokes fun at peoples spelling, yet looking at his previous posts he doesn't appear to know the basic difference between "your" and "you're", "where" and "were" etc.

Wed, 2011-10-05 19:37 — matthew fox (not verified)

I laugh at your use of a calendar Bozo555, it is the height of hilarity.

According to the simpleton, Tony Blair won his first election in Q4 1997.

Fri, 2011-09-30 12:47 — mike cobley (not verified)

You gotta laugh. Hilarious to see repeated news items about consumer confidence and speculation about high street sales etc. The obsession with the notion of consumer confidence seems utterly divorced from the concrete facts of consumers' disposable income. These reports seem based on the idea that ordinary people are sitting on heaps of cash that they`re not spending because their 'confidence' is low. Utter utter tosh - we aren't spending because, get this - WE'RE TAPPED OUT, SKINT, STONEY-BROKE, HARD UP.

Get the picture?

Wed, 2011-10-05 20:24 — Vic Singh

Confidence is very low. Even those people who can borrow won't because they have been scared out of their wits by Cameron and Co.!!

Talk avout running UK plc down, Clegg, Cameron, and Yellow and Blue Tories have done this.

Sat, 2011-10-01 20:41 — Indu Pendent (not verified)

@matt
We are only just starting the journey.

Because of your friends, there is a lot of pain to come mending the economy wrecked by Labour for a second time (remember 1970's). Retailers especially are going to suffer terribly in the next 2 years.

The money has all been spent, needs repaying and Labour left us with an imbalanced state, an imbalanced ecomony and the biggest peace time structural deficit. Comsumer living standards still have a long way to fall and UK industrial businesses (not retailers who are making the most noise via the FSB) need to be given priviledged treatment. The abusive practices in buisnesses encouraged by Labour will also need to be addressed with curbs on excessive board room remuneration.

Your friends like you are incapable of making difficult unpopular decisions -- like transfering wealth away from voters and implementing policies that benefit businesses, especially in non-retail sectors e.g. high VAT, low corportation tax, low employers employment tax and low borrowing rates through protecting the AAA.

Wed, 2011-10-05 20:27 — Vic Singh

"matthew fox
04 October 2011 at 12:59

It must be a full moon, I can hear a chorus of crackpots.

Criticism from Indu Pendent, the imbecile who declared Osborne only borrowed £100 Billion in his first year, I mean he was only £50 billion out. "

Village Idiots like Indu Pendant are my weekly entertainment, don't spoil it. The man actually thinks he is clever. :-) It's hiarious showing my office chums his drivel.

Tue, 2011-10-04 19:11 — Awake!

matt
i've answered the question twice on the evidence re Lagarde view on state pensions- for tghe THIRD time, she made reference to long term liabilities...
@ Mr Blanchflower and RC moya
For 7 weeks now I've been saying no to more debts etc. I cited Bernanke saying he's not so keen, in the last 6 months but u ignored this. I know you RESPECT him at least. He now says there won't be any QE, hasn't worked, talk of pushing on a string by Fisher, yet u still keep pushing it seems...
Are yourself and Krugman the only 'economists' left on this planet who still call for more debt?
bernanke says no immediate plans for QE... Is everyone else wrong and yourself right?

Mon, 2011-10-03 13:58 — Awake!

matt
Indu has been asking that question for weeks. U are indeed an clown, always sniping and crticising but never answering this same fundamental question. U are the same part of the problem that causes the mess, namely that u have a strong hatred of tories and want to be in charge but u coudn't run a bath if u tried.
Why not answer the question?

Fri, 2011-09-30 13:45 — Mark (not verified)

Is your mission in life Professor to make everyone miserable?

Talk about a self-fulfilling prophecy. You can't wait for a douple-dip can you?

Sat, 2011-10-01 21:00 — Indu Pendent (not verified)

@swatantra nandanwar

"So the ordinary prudent consumer is going to save their cash and forgo the luxuries."

I think you've nailed it.

We need a 5 year period of everyone keeping their heads down, grafting, gritting their teeth, paying down debts or even saving. The Chinese do it as a way of life - they dont spend money and instead export goods and rake in the cash ... they have amassed a $5Tn cash mountain - about what Labour and Obama borrowed. We should learn lesson from China who have more successful economic model than us and do it better.

Sat, 2011-10-01 21:14 — Indu Pendent (not verified)

@danny

We have too many retailers in the UK especially with the continued growth of etailers. e.g. look at Waterstones vs Amazon.

Its part of the issue with the imbalanced economy. We need to shrink high street retail, financial services and the public sector. There is going to be a lot of unpopular frictional unemployment albiet this will subdue wage rates, increase worker flexibility and make the UK workforce more competitive.

Tue, 2011-10-04 19:45 — Indu Pendent (not verified)

@matt
Why not say whether the coalition should increase or decrease borrowing?

I think the UK should pay down its debts to around half the current level over 20 years. It will create a tough low cost/ inflation environment with subdued internal demand suppressing imports. It forces businesses to inovate, be competitive and export like the economy the Germans created.

Fri, 2011-09-30 14:19 — Ian hull (not verified)

Pathetic playground journalism. The only thing your article is missing at the end is a ner, ner, ner-ner, ner.

Tue, 2011-10-04 19:48 — matthew fox (not verified)

Awake, I think your will find Indu Pendent has just enough intelligence to find the evidence in question.

Please do not get involved an issue that is way beyond your small mind.

Tue, 2011-10-04 19:55 — Indu Pendent (not verified)

@matt

Why do you keep calling me a "he"? Is it a pathetic Foxy attempt at trying to be insulting or are you the genuine article when it comes to being the villiage idiot? Indu's a girls name moron.

Wed, 2011-10-05 22:05 — mike555

@Matt

"I laugh at your use of a calendar Bozo555, it is the height of hilarity."

You keep mentioning the calendar thing, yet there is no logic behind it.

"According to the simpleton, Tony Blair won his first election in Q4 1997."

Nowhere have I ever said that. Post up where I have?

Mon, 2011-10-03 15:40 — Boomandbuster (not verified)

awake, matt is not on here to answer questions nor is he here to talk about economics, he knows nothing of the subject. his sole mission here is to heckle whilst the adults clean up the mess made by the politics of envy party that is labour. he lives in a dream world where the deficit was somehow magicked up not by chronic over spending and incompetence but by the ghost of margaret thatcher. he also lacks the brains to understand that the biggest boost the uk economy could have would be the resolution of the euro crisis which would have far more impact than any VAT cut.

Sat, 2011-10-01 23:59 — matthew fox (not verified)

What tosh Indu Pendent, your on a journey, it is a long walk on a short pier.

Didn't Cameron say at the beginning of the year " The Dark Days are behind us "

Is that another contradiction?

I see the OBR predicted borrowings would decline by 16%, yet Osborne only managed to get borrowings down by 7%.

Why do pretend to know more then the FSB Indu Pendent, didn't you say small businesses where benefiting from Osborne's economic plan?

How can you say it is the retailers who have great sway with the FSB? where's the beef old chap.

Your forgetting Manufacturing has slowed down to a crawl, construction is shedding jobs and the vaunted export recovery stalling.

http://www.bloomberg.com/news/2011-09-22/u-k-export-order-book-declines-...

The FSB have called for the vat rate to be cut to 5%, in order to help construction.

Sun, 2011-10-02 00:16 — Dickie1

@indu pendant

"...paying down debts or even saving."

What is the point of that, you get no interest. All savers do is fund cheap mortgages for losers. I know, because I have saved for years

Fri, 2011-09-30 15:19 — Robert Taggart

If the consumption of materialistic tat be the sum total of our countries raison d'etre - we have no reason for being !

Thu, 2011-10-06 21:06 — matthew fox (not verified)

Loomandcuster, who pray is Matty?

There was a global crisis in 2008, yet for some reason, Osborne and Cameron, would have none of it.

According to Michael Fallon, Vice Chairman of Conservative Party, Osborne produced a " Weak and Confused Response " to the storm clouds of Autumn 2008.

http://www.telegraph.co.uk/news/worldnews/wikileaks/8175390/WikiLeaksGeo...

When you talk about credible forecasters, are you including Paul Krugman and Joesph Stiglitz?

It seems their crystal balls where functioning extremely well.

http://www.independent.co.uk/news/uk/politics/osbornes-first-budget-its-...

http://www.guardian.co.uk/politics/2010/oct/22/paul-krugman-condemns-spe...