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Economy in Brief

U.S. Consumer Confidence Ticks Up M/M
by Tom Moeller  August 27, 2013

The Conference Board's Consumer Confidence Index ticked up to 81.5 this month from an upwardly revised 81.0 during July, last month reported as 80.3. The level of the confidence index peaked at 82.1 in June. Consensus expectations were for a slip to 79.0. During the last ten years, there has been a 47% correlation between the level of confidence and the three-month change in real PCE.

Holding back the overall level of confidence was a decline in consumers' assessment of the present economic situation. This index fell to 70.7 from its cycle-high of 73.6. A lessened 18.4% of respondents viewed business conditions as good. Also, an increased 55.6% believed that jobs were not plentiful. That's somewhat surprising since just 33.0% thought that jobs were hard to get, the least since October 2008.

The expectations component of confidence rose to 88.7 and made up a piece of its July decline. It remained down, however, from the June peak of 91.1. Expectations for business conditions held steady month-to-month, but remained greatly improved versus the January low. The sense of employment prospects improved slightly yet remained below the June high. Expectations for the inflation rate in twelve months were roughly steady m/m at 5.5%, down from the 6.7% high in 2011. Expectations for higher interest rates in twelve months slipped to 67.9% of respondents. That followed last month's surge to the highest level since July 2006. The percentage expecting higher stock prices recovered moderately after last month's sharp decline.

The consumer confidence index for those under 35 years backpedaled from its July high. Confidence amongst middle-aged individuals reached a new cycle high, while confidence amongst individuals over 55 years fell backward following two months of increase.

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

Conference Board (SA, 1985=100) Aug Jul Jun Y/Y % 2012 2011 2010
Consumer Confidence Index 81.5 81.0 82.1 33.0 67.1 58.1 54.5
  Present Situation 70.7 73.6 68.7 52.0 49.8 36.1 25.7
  Expectations 88.7 86.0 91.1 24.8 78.6 72.8 73.7
Consumer Confidence By Age Group
  Under 35 Years 101.5 106.0 101.1 29.8 86.5 77.3 70.4
  Aged 35-54 Years 88.4 80.5 84.6 32.5 68.5 59.8 55.1
  Over 55 Years 66.7 68.2 70.5 40.7 56.6 47.3 47.4
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