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 According to many economists, the nation has been in a recession that in retrospect began in March 2001. Consumer confidence has been on a downward spiral for quite some time; however, it began to recover from its lowest levels in December 2001. It is likely that the Enron scandal contributed to the slight downward blip in February, but some strong signs of recovery finally began to appear in March 2002. This is a good sign for the Michigan tourism industry since consumers tend to spend more money on travel when they express higher levels of confidence in the economy.
Although overall consumer confidence dropped a bit in April 2002, it's reassuring to note that one of the components comprising CCI, the Expectations Index, has risen dramatically over the early months of 2002. This means that consumers are anticipating an improvement in the U.S. economy. Many economists concur. On the other hand, the other component of CCI, the Present Situation Index, is substantially lower so far this year than it was last year. This just means that consumers are not really confident about the current circumstances of the nation's economy at this point in time. This could have implications for the upcoming summer travel season, suggesting that it may experience a slow start but a strong finish.
CCI was relatively flat during the months of March, April and May of 2002. However, in June 2002 (which has not yet been added to the above graph), the index dropped four points to 106.4. "Weak labor market conditions, generally soft business conditions and waning public confidence in questionable business practices (i.e., WorldCom, Tyco, etc.) have helped erode consumer confidence," noted Lynn Franco, Director of The Conference Board's Consumer Research Center. "Still, the latest readings point to continued consumer spending and moderate economic growth."
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