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Economy in Brief

U.S. Consumer Confidence Retreats Amongst Individuals Over 55
by Tom Moeller  February 25, 2014

Consumer confidence, as measured by the Conference Board, fell to an index reading of 78.1 this month (+14.9% y/y) from January's 79.4, revised down from 80.7. The latest figure fell short of the Action Economics Consensus Forecast reading of 80.1. During the last ten years there has been a 45% correlation between the level of confidence and the three-month change in real personal consumption expenditures.

By age group, confidence deteriorated amongst individuals over 55 years old. The 10.0% m/m decline (+3.2% y/y) reversed increases during the prior two months. Confidence amongst individuals aged less than 35 years old made up some of this decline with a 10.3% m/m rise (24.7% y/y). Respondents aged 35-54 years old became slightly more confident m/m (20.9% y/y).

The expectations confidence indicator led the overall reading lower with a 6.3% decline (+4.6% y/y) to 75.7. The present situations reading offset some of that downward pressure with a 5.7% rise (33.1% y/y) to 81.7. Business conditions were rated as good by 21.5% of respondents, an expansion high. Only 16.3%, however, thought they would be better in six months, down from 21.4% who thought so in June. Jobs were viewed as hard to get by a steady 32.5% of respondents, an expansion low. Only 13.3% thought that there would be more jobs in six months. A slightly improved 0.9% of respondents expected to buy a new home in six months. Just 45.5% were going to buy a major appliance, the least since early 2012. A very-much improved 5.2% of respondents planned to buy a new automobile within the next six months, the most since 2007. Expectations for the inflation rate held m/m at 5.2%, the lowest reading since late 2010.

The Consumer Confidence data is available in Haver's CBDB database. The total indexes appear in USECON and the market expectations are in AS1REPNA.

Monetary Policy and Financial Stability from Federal Reserve Board Governor Daniel K. Tarullo can be found here.

Conference Board (SA, 1985=100) Feb Jan Dec Y/Y % 2013 2012 2011
Consumer Confidence Index 78.1 79.4 77.5 14.9 73.2 67.1 58.1
  Present Situation 81.7 77.3 75.3 33.1 67.6 49.8 36.1
  Expectations 75.7 80.8 79.0 4.6 77.0 78.6 72.8
Consumer Confidence By Age Group
  Under 35 Years 109.5 99.3 90.8 24.7 93.1 86.5 77.3
  Aged 35-54 Years 81.6 80.2 83.9 20.9 76.8 68.5 59.8
  Over 55 Years 62.0 68.9 65.9 3.2 61.2 56.7 47.3
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