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Economy in Brief

U.S. Consumer Confidence Amongst Young Individuals Improves
by Tom Moeller  April 30, 2013

There's been a recent turnaround in overall consumer confidence led by those under 35 years of age. The Conference Board's April Consumer Confidence Index rose to 68.1 and reversed its March decline to an upwardly revised 61.9. Consensus expectations had been for a further decline to 60.7 this month. During the last ten years, there has been a 47% correlation between the level of confidence and the three-month change in real PCE.

Consumer confidence varied greatly by age group, but those under 35 years old became much more confident this month. The index rose to its highest level since November. Confidence amongst middle-aged individuals also improved but they remained less confident than younger individuals. Those over 55 years became more confident about the economy but they remained the most skeptical age group.

A sharp improvement in the consumer expectations reading to 73.3 from 63.7 led the strength in the overall confidence index this month. Expectations for higher income rose to the highest percentage in nearly two years. Expectations for business conditions and employment, however, remained depressed. Expectations for the inflation rate fell to 5.5%, the lowest level in nine months but more individuals expect higher interest rates.

The present situations index improved moderately m/m to 60.4 but has moved sideways since October. Just 17.2% of respondents thought that business conditions were good. The reading of the labor market, however, remained improved. Jobs were thought to be hard to get by 37.1% of respondents. That was up slightly m/m but down sharply versus the high of 49.4% in June 2011. Jobs were viewed as plentiful by 57.1% of individuals; down from the recent high but up sharply from the 2011 low of 45.0%.

The Consumer Confidence data is available in Haver's CBDB database.

Conference Board (SA, 1985=100) April Mar Feb Y/Y % 2012 2011 2010
Consumer Confidence Index 68.1 61.9 68.0 -0.9 67.1 58.1 54.5
  Present Situation 60.4 59.2 61.4 18.0 49.8 36.1 25.7
  Expectations 73.3 63.7 72.4 -8.8 78.6 72.8 73.7
Consumer Confidence By Age Group
  Under 35 Years 96.1 83.2 87.8 17.5 86.5 77.3 70.4
  Aged 35-54 Years 67.4 62.3 67.5 -4.3 68.5 59.8 55.1
  Over 55 Years 58.1 52.1 60.1 -5.4 56.6 47.3 47.4
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