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Economy in Brief

U.S. Consumer Confidence Pulls Back Slightly
by Tom Moeller  April 29, 2014

Following a sharp rise in March, consumer confidence, as measured by the Conference Board, eased to an index reading of 82.3 this month (+19.3% y/y) from an upwardly revised 83.9. The latest figure remained nearly the highest since January 2008 and roughly matched the expected 82.8 in the Action Economics Forecast Survey. During the last ten years, there has been a 44% correlation between the level of confidence and the three-month change in real personal consumption expenditures.

The present situations reading led overall confidence lower with a 5.1% decline (+28.4% y/y) to 78.3 from a revised 82.5. That was offset by stability in the expectations reading at 84.9 (14.3% y/y). Business conditions were rated as good by a slightly lessened 21.8% of respondents, still near the highest level since October 2007. Only 17.4%, however, thought conditions would be better in six months. Jobs were viewed as hard to get by a slightly increased 32.5% of respondents, but that still was near the expansion low. Only 15.0%, however, thought there would be more jobs in six months. A depressed 5.6% of respondents expected to buy a home in six months and a lessened 46.3% were going to buy a major appliance, the least since December 2012. A greatly reduced 3.6% of respondents planned to buy a new automobile within the next six months. Expectations for the inflation rate in six months held steady at 5.5%, but that still was the highest reading since October.

By age group, confidence deteriorated amongst individuals over 55 years old. A 3.6% m/m decline dented March's 14.6% increase but left confidence near its highest level since last June. For those aged 35-54 years old, confidence also fell 3.6% (+24.7% y/y) but still was nearly at the highest level since August. Confidence amongst individuals under age 35 improved 5.9% (12.8% y/y).

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

Conference Board (SA, 1985=100) Apr Mar Feb Y/Y % 2013 2012 2011
Consumer Confidence Index 82.3 83.9 78.3 19.3 73.2 67.1 58.1
  Present Situation 78.3 82.5 81.0 28.4 67.6 49.8 36.1
  Expectations 84.9 84.8 76.5 14.3 77.0 78.6 72.8
Consumer Confidence By Age Group
  Under 35 Years 108.4 102.4 107.3 12.8 93.1 86.5 77.3
  Aged 35-54 Years 86.2 89.4 82.6 24.7 76.8 68.5 59.8
  Over 55 Years 69.8 72.4 63.2 20.1 61.2 56.7 47.3
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