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Economy in Brief

U.S. Consumer Confidence Continues To Improve
by Tom Moeller  August 26, 2014

The Conference Board reported that their reading of consumer confidence improved 2.3% this month to 92.4 (13.0% y/y) from 90.3 in July, revised from 90.9. The latest figure beat expectations for 88.8 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 present situation figure led overall confidence higher with a 7.6% m/m rise (33.4% y/y) to 94.6 from a revised 87.9, initially reported as 88.3. That was accompanied by a 1.1% m/m decline (+2.1% y/y) in the expectations reading to 90.9 from 91.9, revised from 92.7.

Business conditions were rated as good by an improved 23.9% of respondents. Jobs were viewed as hard to get by 30.6% of respondents, the expansion low. A lessened 17.0% thought there would be more jobs in six months and a steady 20.4% thought business conditions would be better in six months. To the downside, a greatly lessened 45.7% of respondents were going to buy a major appliance but an easier 4.7% of respondents planned to buy a new automobile within the next six months. Expectations for the inflation rate in six months ticked up to 5.5%.

By age group, confidence improved greatly amongst individuals under 35 years old to its highest level since September 2013. For those aged 35-54 years old, confidence slipped while confidence amongst individuals aged 55 and over gained to its highest level since October 2007.

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) Aug Jul Jun Y/Y % 2013 2012 2011
Consumer Confidence Index 92.4 90.3 86.4 13.0 73.2 67.1 58.1
  Present Situation 94.6 87.9 86.3 33.4 67.6 49.8 36.1
  Expectations 90.9 91.9 86.4 2.1 77.0 78.6 72.8
Consumer Confidence By Age Group
  Under 35 Years 108.6 104.8 105.5 3.9 93.1 86.5 77.3
  Aged 35-54 Years 96.4 98.8 91.2 7.1 76.8 68.5 59.8
  Over 55 Years 81.5 75.9 73.5 25.6 61.2 56.7 47.3
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