US Consumer Demand down from July - but still on track for recovery

After a remarkable upswing of 40 points in July, the monthly US Consumer Demand Index, US CDI, slipped back 28 points in August. However, this is a retrenchment, not a reversal: consumer spending in the USA is still on track for recovery. Both the monthly index and the three-month moving average are significantly higher than their all-time low levels of February 2009. (See Figure 1) The downturn is broad based, with buying decisions for cars the most significant - not unexpected after the surge of activity following the “cash for clunkers program”. Data for the August survey was collected from the 19th to 23rd of August.
 
The Consumer Confidence Index published yesterday by The Conference Board increased from 47.4 in July to 54,1 in August, is trailing the surge in the US CDI for July. The cutoff date for The Conference Board's August survey was August 18th. We expect the Consumer Confidence Index from The Conference Board for September, which will be published on September 29, to retreat - trailing our US CDI for August.