Today the University of Michigan released the preliminary number for its Consumer Sentiment Index for November. Today's figure was 90.7, a half point higher than October's final reading of 90.2, and 1.8 points higher than the near-term low of 88.9 set back in September. While the Index has been edging upward for the past two months it is still well below the nine-month high of 94.4 set in July.

You've probably noticed that we regularly report on the status of two different consumer confidence indexes: the University of Michigan Index and the Conference Board Index. They both are measures of the feelings of particular groups of survey subjects about the course of their respective economic futures.

Sometimes the month-to-month changes in the two indexes are in the same direction and sometimes they are not. I got to thinking about what we might come up with if we combined the two indexes -- added them together and divided by two -- to come up with a composite index of the sentiment of the two survey groups. So, I did it, and here it is, for the very first time anywhere: Merlin's Monthly Magical Mysterious Michigan/Conference Composite Consumer Confidence Index.

This Index made a high of 98.6 in April, then fell for the next two months to a low of 93.5 in June. In July the Index jumped back up to 97.9, then declined for two months again to a low of 93.1 in September. During October the Index edged up to 93.6. Over this seven-month period we see a pattern of lower highs and lower lows. In other words, the Composite Index is telling us that consumer confidence is in a downtrend.

Byline: Lafferty (MF Merlin)

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