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Economy in Brief

U.S. Consumer Confidence Improves to Expansion High
by Tom Moeller  September 27, 2016

The Conference Board reported that's its Consumer Confidence index increased 2.3% (1.5% y/y) to 104.1 during September following a 5.3% jump in August. It was the highest level since August 2007. A 1.9% rise had been expected in the Action Economics Forecast Survey. During the last ten years there has been a 70.0% correlation between the level of confidence and the y/y change in real PCE.

By age group, confidence amongst individuals under 35 years old declined 6.2% (-7.6% y/y) to the lowest level since May. This was offset by a 10.1% rise (13.7% y/y) in confidence amongst individuals aged 55 and over. Confidence amongst those aged 35-54 fell slightly (-0.5% y/y).

The index of confidence about the present situation improved 2.6% (6.8% y/y) following a 5.5% increase, while the future confidence index gained 2.0% (-3.3% y/y) after a 5.0% rise.

A reduced 27.4% of respondents felt that business conditions were good. That reversed the prior month's gain. An increased 27.9% of individuals thought that jobs were plentiful, the most of the economic expansion. A reduced 21.6% thought jobs were hard to get, the least of the expansion.

The outlook for future business conditions deteriorated slightly, but the percentage who thought that there would be more jobs rose to the highest level (15.1%) in more than a year. Expectations for the inflation rate rose to 5.0%, the highest point since November, while an increased 60.2% thought that interest rates would rise. Plans to buy a new home plummeted to the lowest percentage (0.6%) since April of last year. Total plans to buy a major appliance eased to 49.2%, and it's been moving sideways for two years.

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 % 2015 2014 2013
Consumer Confidence Index 104.1 101.8 96.7 1.5 98.0 86.9 73.2
  Present Situation 128.5 125.3 118.8 6.8 111.7 87.4 67.6
  Expectations 87.8 86.1 82.0 -3.3 88.8 86.6 77.0
Consumer Confidence By Age Group
  Under 35 Years 114.9 122.5 120.1 -7.6 116.0 106.6 93.1
  Aged 35-54 Years 112.6 113.0 104.8 -0.5 103.9 92.4 76.8
  Over 55 Years 93.0 84.5 80.9 13.7 84.1 73.8 61.2
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