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Economy in Brief

U.S. Consumer Confidence Improves to Highest Level Since October 2007
by Tom Moeller  July 29, 2014

The Conference Board reported that their reading of consumer confidence improved 5.2% this month (12.2% y/y) to 90.9 from 86.4 in June, revised from 85.2. The latest figure beat expectations for 85.5 in the Action Economics Forecast Survey. 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. The expectations figure led overall confidence higher with a 7.3% m/m rise (7.8% y/y) to 92.7 from a revised 86.4, initially reported as 85.1. That was accompanied by a 2.3% m/m gain (20.0% y/y) in the present situations reading to 88.3 from 86.3, revised from 85.2.

Business conditions were rated as good by a slightly lessened 22.7% of respondents. Jobs were viewed as hard to get by 30.7% of respondents, the expansion low. An improved 19.1% thought there would be more jobs in six months and a 10-month high of 20.2% thought business conditions would be better in six months. To the downside, a greatly lessened 46.5% of respondents were going to buy a major appliance but a higher 4.7% of respondents planned to buy a new automobile within the next six months. Expectations for the inflation rate in six months slipped to 5.4%, a five month low.

By age group, confidence deteriorated slightly amongst individuals under 35 years old. For those aged 35-54 years old, confidence jumped to its highest level since August 2007 while confidence amongst individuals aged 55 and over gained to its highest level since January 2008.

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

The Wage Growth Gap for Recent College Grads from the Federal Reserve Bank of San Francisco can be found here.

Conference Board (SA, 1985=100) Jul Jun May Y/Y % 2013 2012 2011
Consumer Confidence Index 90.9 86.4 82.2 12.2 73.2 67.1 58.1
  Present Situation 88.3 86.3 80.3 20.0 67.6 49.8 36.1
  Expectations 92.7 86.4 83.5 7.8 77.0 78.6 72.8
Consumer Confidence By Age Group
  Under 35 Years 105.1 105.5 106.4 -0.8 93.1 86.5 77.3
  Aged 35-54 Years 99.1 91.2 88.4 23.1 76.8 68.5 59.8
  Over 55 Years 77.1 73.5 67.0 13.0 61.2 56.7 47.3
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