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Economy in Brief

U.S. Consumer Confidence Retreats to Three-Month Low
by Tom Moeller  October 27, 2015

The Conference Board's Consumer Confidence Index in October unexpectedly reversed improvement during the prior two months. The overall index declined 4.9% to 97.6 but remained up 3.7% y/y. The consensus expectation was for a level of 102.8 in the Action Economics Forecast Survey. The reading of the present situation declined 6.8% (+18.7% y/y) to the lowest level since June. Consumer expectation eased 3.1% (-6.2% y/y), off for the fourth straight month.

Fewer respondents perceived that the present business situation was good but the disappointment was slight. That was followed by fewer perceiving that jobs were plentiful. Nevertheless, jobs were viewed as hard to get by a slightly increased 52.0% of respondents, though that remained down sharply from the August high of 56.2%.

The expected outlook similarly deteriorated but by less than the appraisal of the current situation. The decline was led by fewer respondents believing there would continue to be more jobs accompanied by fewer who expected an increase in income. The percentage who thought business conditions would get better held steady near the middle of the range of the last year. Expectations for the inflation rate in twelve months also held steady at 5.1%, the upper end of the range during the last year.

Buying plans included the highest percentage of respondents planning to by a new home in nearly a year. Plans to buy an existing home were not strong, however, contrary to last week's reading of near-record sales. Plans to buy a major appliance sales strengthened, but the degree was not high and plans to buy an automobile deteriorated, notably for a used one.

By age group, confidence amongst those under age 35 fell to the lowest level in three months. Confidence also was depressed for folks in their middle-age. Confidence amongst individuals over age 55 similarly eased, but just slightly m/m. Confidence in this group was down sharply, however, from where it was at the beginning of the year.

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) Oct Sep Aug Y/Y % 2014 2013 2012
Consumer Confidence Index 97.6 102.6 101.3 3.7 86.9 73.2 67.1
  Present Situation 112.1 120.3 115.8 18.7 87.4 67.6 49.8
  Expectations 88.0 90.8 91.6 -6.2 86.6 77.0 78.6
Consumer Confidence By Age Group
  Under 35 Years 111.9 124.4 118.0 -8.2 106.6 93.1 86.5
  Aged 35-54 Years 109.2 113.2 109.9 13.3 92.4 76.8 68.5
  Over 55 Years 81.5 81.8 86.8 1.5 73.8 61.2 56.7
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