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Economy in Brief

U.S. Consumer Confidence Declines To Lowest Since May
by Tom Moeller  September 24, 2013

The Conference Board's Consumer Confidence Index fell to 79.7 this month versus 81.8 during August, last month reported as 81.5. The level of the confidence index peaked at 82.1 in June. Consensus expectations were for a decline to 80.0. During the last ten years, there has been a 47% correlation between the level of confidence and the three-month change in real PCE.

The decline in overall level of confidence was caused by a drop in the consumer expectations reading to 84.1 from 89.0. More respondents thought that income and employment gains would slow during the next six months. Expectations for the inflation rate in twelve months slipped to 5.3%, its lowest level since May. A lessened 66.6% felt interest rates would rise but that still was up sharply from the Q3'12 figure of 45.4%. Plans to buy a new home rose slightly while plans to buy major appliances slipped. 

Consumer's assessment of the current economic environment made up most of its August decline with a rise to 73.2, nearly the highest level of the economic recovery. An improved percentage thought that business conditions were good. Labor market conditions also were viewed as good as just 32.7% of respondents thought that jobs were hard to get, the least in five years. However, a raised percentage thought that jobs were not so plentiful, the most also in five years. 

The consumer confidence index for those over 55 years fell to its lowest level since May while the reading for those aged 35-54 years slipped moderately from last month's high. Individuals aged less than 35 years grew the most confident since just before the recession.  

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

Conference Board (SA, 1985=100) Sep Aug Jul Y/Y % 2012 2011 2010
Consumer Confidence Index 79.7 81.8 81.0 16.5 67.1 58.1 54.5
  Present Situation 73.2 70.9 73.6 50.3 49.8 36.1 25.7
  Expectations 84.1 89.0 86.0 3.2 78.6 72.8 73.7
Consumer Confidence By Age Group
  Under 35 Years 111.0 104.5 106.0 20.9 86.5 77.3 70.4
  Aged 35-54 Years 86.2 90.0 80.5 24.7 68.5 59.8 55.1
  Over 55 Years 61.9 64.9 61.9 9.0 56.6 47.3 47.4
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