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Economy in Brief
Decline in Refinancing Drags Down U.S. Mortgage Applications
The MBA Mortgage Loan Applications Index fell 1.9% w/w (+56.2% y/y) in the weekend January 15...
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Euro area inflation is negative on a year-over-year basis for five months in a row...
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Macro Expectations Hold to the High Ground
In January, the ZEW index paints a mixed and somewhat uneven view of its survey universe...
U.S. Housing Affordability Improves During November
The NAR reported that its Fixed Rate Mortgage Housing Affordability Index rose 0.7% (-0.7% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Gerald D. Cohen June 25, 2019
The Conference Board Consumer Confidence Index fell a great-than-expected 7.5% to 121.5 in June (-4.4% year-on-year), from a downwardly revised 131.3 in May (was 134.1). This is the lowest reading since September 2017 and well below the Action Economics Forecast Survey forecast of 131.9. During the past ten years, there has been a 59% correlation between the level of consumer confidence and the year-on-year change in monthly real consumer spending.
Consumer views of the current situation and expectations both dimmed in June, with the present situation down 4.7% to 162.6 (+0.6% y/y) and expectations dropping 10.4% to 94.1 (-9.5% y/y). The labor market differential, representing the difference between respondents indicating 'jobs are plentiful' and those saying 'jobs are hard to get', declined to 27.6% the lowest reading in a year. This series has a 97% correlation with the unemployment rate over the last ten years. The decline in the jobs gap was primarily the result of a jump in the 'jobs hard to get' measure to its highest rate in almost two years.
Interestingly, despite soft inflation readings, the expected inflation rate in twelve months rose to 5.1%, the fastest since October 2015. The share of respondents planning on buying a new home in six-months increased to 6.8% in June. Meanwhile, those planning on buying a major appliance slid to 46.6%, the lowest reading in four-and-a-half years.
Confidence fell for all demographic groups, led by an 11.8% drop for those 55 years and over. Over the last year the confidence of those under 35 has fallen 11.3%.
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.
Economic Outlook and Monetary Policy Review from Federal Reserve Chairman Jerome H. Powell is available here.
Conference Board (SA, 1985=100) | Jun | May | Apr | Jun Y/Y % | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Consumer Confidence Index | 121.5 | 131.3 | 129.2 | -4.4 | 130.1 | 120.5 | 99.8 |
Present Situation | 162.6 | 170.7 | 169.0 | 0.6 | 164.8 | 144.8 | 120.3 |
Expectations | 94.1 | 105.0 | 102.7 | -9.5 | 107.0 | 104.3 | 86.1 |
Consumer Confidence By Age Group | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Under 35 Years | 112.7 | 120.0 | 145.0 | -11.3 | 133.7 | 130.2 | 122.4 |
Aged 35-54 Years | 131.2 | 135.1 | 133.1 | -0.6 | 132.2 | 123.5 | 106.2 |
Over 55 Years | 116.9 | 132.5 | 119.8 | -4.8 | 126.3 | 112.9 | 84.6 |