Slow CDI upswing consolidated by demand for cars and other durables! The three-month moving average, which is the most solid indicator of future US consumer demand, increased for the fifth month in a row. For the third month in a row demand for cars is, significantly above 2008 and 2009 levels. Demand for other durables is up from July’s all time low. Demand for durables such as furniture, white goods, radios and TVs, however, is still significantly below the pre-crisis level. Data for the August survey was collected from the 18th to the 22nd of August, but in spite of several negative data revealed in the weeks up to and during the days of interviewing, US consumers did not retrench.

 Consumer spending and personal incomes in the U.S. unexpectedly stagnated in June, reports Bloomberg, citing Commerce Department figures. At the same time, Federal Reserve Chairman Ben Bernanke says consumer spending may pick up in the coming months as wages increase.  We agree with chairman Bernanke.  Based on the data in our latest Consumer Demand Index survey, consumer spending plans are continuing their upward path. Consumers are however still hesitant to plan major purchases, and the increased levels of buying plans we show are from a very low level, but the trend line is clear.

 Our May report shows the third month on month increase for the CDI, a positive indicator – however, the index is still at a low level compared to pre-crisis levels and now stands at just one tenth of the 2002 CDI benchmark figure of 100.   Commenting on last month’s report, which showed record-low CDI figures, we indicated that the risk of a double-dip recession had increased. Our current interpretation of the latest figures is that we’ve moved a few steps away from another downturn but there are new risks on the horizon – the possible burst of the Chinese bubble and the prospect of war on the Korean peninsular.

The March-edition of the US Consumer Demand Index to be published at 1400 hrs GMT on Wednesday the 31st will be the first survey to indicate the reaction to the healtcare victory. Data collection by TNS from the 24th to the 28th og March.

 Analysis and comments by

Globalist and Business Cycle Analyst Jorn Thulstrup, MA (Econ)  

The COP15 Climate Conference held in Copenhagen in December, fuelled by political and economic special interests and enthusiastically embraced by Danish media, preoccupied people in this country far more than the rest of the world. For a lengthy period of time, leading Danish politicians and commentators seemed to be suffering from the illusion that, in terms of climate and energy, Denmark could rule the world. A widespread perception flourished that Denmark, as host of COP15, could create some kind of platform to market Danish technology, especially wind energy and enzymes used in the production of bio-ethanol.