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Economy in Brief

U.S. Consumer Confidence Unexpectedly Deteriorates
by Tom Moeller  September 30, 2014

The Conference Board reported that their reading of consumer confidence declined to 86.0 this month (+7.2% y/y) from 93.4 during August, revised from 92.4. The latest figure was the lowest since May and fell short of expectations for 92.3 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 moved 4.8% lower m/m (+21.6% y/y) to 89.4 from a revised 93.9, initially reported as 94.6. That was accompanied by a 10.1% m/m decline (-1.2% y/y) in the expectations reading to 83.7 from 93.1, revised from 90.9.

Business conditions were rated as good by a stable 23.4% of respondents. Jobs were viewed as hard to get by a steady 30.1% of respondents, nearly the expansion low. A greatly lessened 15.2% thought there would be more jobs in six months, the least since May, and a lessened 18.6% thought business conditions would be better in six months. To the upside, a greatly improved 51.3% of respondents were going to buy a major appliance but an easier 4.3% 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%.

By age group, confidence deteriorated greatly for those under age 35 years old to the lowest level since January. For those aged 35-54 years old as well as those over 55, confidence also fell to the lowest level in three months.

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) Sep Aug Jul Y/Y % 2013 2012 2011
Consumer Confidence Index 86.0 93.4 90.3 7.2 73.2 67.1 58.1
  Present Situation 89.4 93.9 87.9 21.6 67.6 49.8 36.1
  Expectations 83.7 93.1 91.9 -1.2 77.0 78.6 72.8
Consumer Confidence By Age Group
  Under 35 Years 100.1 110.4 104.8 -8.5 93.1 86.5 77.3
  Aged 35-54 Years 94.9 100.5 98.8 8.6 76.8 68.5 59.8
  Over 55 Years 72.5 80.7 75.9 15.3 61.2 56.7 47.3
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