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Economy in Brief

U.S. Consumer Confidence Improves
by Tom Moeller  April 30, 2019

The Conference Board reported that its Consumer Confidence Index increased 4.0% (2.9% y/y) to 129.2 during April and reversed most of the March decline. The m/m rise exceeded expectations in the Action Economics Forecast Survey which were for a decline to 126.0. During the past ten years, there has been a 61% correlation between the level of consumer confidence and the year-on-year change in monthly real consumer spending.

The reading of the present situation rebounded 3.3% (6.9% y/y) to 168.3 after the March decline. The expectations reading rose 4.8% (-1.2% y/y) to 103.0 and made up most of the March slide.

The percentage of respondents who believed that business conditions were good rose modestly to 37.3% but remained below the high of 42.0% last November. The percentage of respondents who believed jobs were plentiful rebounded to a cycle-high of 46.8%. Jobs were viewed as hard to get by a slightly lessened 13.3%, still higher than the cycle low of 11.7% reached in February.

On the expectations front, a higher 19.9% of respondents felt that business condition would improve. A fairly steady 17.2% thought that there would be more jobs, down from 22.7% in November. An improved 21.5% felt that income would increase. That was the most since December, but still below the high of 25.4% last August.

Expectations for the y/y increase in the CPI of 4.5% remained below the high of 5.0% who thought so nine months ago. The 54.3% who felt that interest rates would rise was down m/m and below the 73.2% October high.

The 1.1% of respondents who planned to buy a new home was down from this cycle's high of 1.7% registered in July 2017. The percentage who planned to buy a major appliance declined to 48.4%, the fewest in nine months.

By age group, confidence improved broadly. For those under age 35, the confidence reading rebounded 14.8% this month to a new high for the expansion. Confidence in the 35-54 year old age bracket rose, but remained range-bound below the cycle peak for six months. Confidence amongst individuals over age 55 eased slightly m/m and was 12.5% below the November peak.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and the market expectations are in AS1REPNA.

Conference Board (SA, 1985=100) Apr Mar Feb Apr Y/Y % 2018 2017 2016
Consumer Confidence Index 129.2 124.2 131.4 2.9 130.1 120.5 99.8
   Present Situation 168.3 163.0 172.8 6.9 164.8 144.8 120.3
   Expectations 103.0 98.3 103.8 -1.2 107.0 104.3 86.1
Consumer Confidence By Age Group
   Under 35 Years 149.4 130.1 145.3 13.4 133.7 130.2 122.4
   Aged 35-54 Years 131.2 124.9 133.5 -4.3 132.2 123.5 106.2
   Over 55 Years 120.4 122.0 126.2 -2.0 126.3 112.9 84.6
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