Consumer confidence remains very low

The Conference Board's measure of consumer confidence in August was weaker than expected (60.6 vs. 66). As the charts above and below show, although confidence is up from the all-time lows of the last recession, it is very close to the lows associated with every other recession in the past 45 years. This is a reminder that pessimism still rules. The best way to interpret the rally in equities in the past 3+ years is to see it not as a return of optimism, but rather as a grudging acknowledgement that things haven't turned out as bad as expected.