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Economy in Brief

U.S. Consumer Confidence Deteriorates Amongst Young and Old Alike
by Tom Moeller  October 29, 2013

The Conference Board's Consumer Confidence Index fell to 71.2 this month versus 80.2 during September, last month reported as 79.7. The level of the confidence index peaked at 82.1 in June. Consensus expectations were for a decline to 75.0. 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 consumer confidence index for those aged less than 35 years deteriorated the most m/m, reversing nearly all the of gains since March. The index for individuals over 55 years old also fell sharply to the lowest level since March. Confidence amongst middle-agers fell sharply to the lowest level since May.

The decline in overall level of confidence was greatest in the consumer expectations reading to 71.5 from 84.7. The percentage of who thought that business conditions and employment gains would improve during the next six months fell sharply. Expectations for the inflation rate in twelve months rose to 5.5%. A lessened 64.6% 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 fell but plans to buy major appliances rose. 

Consumer's assessment of the current economic environment also fell but just moderately to a reading of 70.7. A lessened percentage thought that business conditions were good. Jobs were viewed as hard to get by a slightly higher 35.8%, but that remained nearly the least in five years.

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

Conference Board (SA, 1985=100) Oct Sep Aug Y/Y % 2012 2011 2010
Consumer Confidence Index 71.2 80.2 81.8 -2.6 67.1 58.1 54.5
  Present Situation 70.7 73.5 70.9 24.7 49.8 36.1 25.7
  Expectations 71.5 84.7 89.0 -14.9 78.6 72.8 73.7
Consumer Confidence By Age Group
  Under 35 Years 85.9 109.4 104.5 -12.6 86.5 77.3 70.4
  Aged 35-54 Years 80.8 87.4 90.0 8.7 68.5 59.8 55.1
  Over 55 Years 55.3 62.9 64.9 -9.2 56.6 47.3 47.4
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