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Economy in Brief

U.S. Consumer Confidence Weakens
by Tom Moeller  September 24, 2019

The Conference Board's Consumer Confidence Index declined 6.8% (-7.5% y/y) during September to 125.1 from a downwardly revised 134.2 in August. A rise to 133.0 had been expected in the Action Economics Forecast Survey. During the last ten years, there has been 69% correlation between the level of confidence and the y/y change in real consumer spending.

The decline in confidence reflected a 10.0% fall (-14.8% y/y) in the expectations component to the lowest level since January. The present situations reading fell 4.0% (-0.2% y/y) to the lowest level in three months.

A greatly lessened 19.0% of respondents felt that business conditions would improve in the next six months, the least since March. A reduced 17.5% expected that there would be more jobs while a lessened 19.0% felt that income would rise. That was the least since January and down from 25.4% twelve months earlier. A reduced 37.3% of respondents felt that business conditions were good, down from 41.0% last October. Jobs were viewed as hard to get by only 11.6% of respondents, the fewest in nearly 20 years, while a slightly lessened 44.8% felt that jobs were plentiful.

Expectations for inflation in twelve months fell slightly m/m to 4.8% and that was below June's high of 5.1%. Forty-three percent of respondents thought that interest rates would rise over the next year versus 73.2% who thought so last October and a lessened 32% thought that stock prices would rise.

A greatly lessened 0.9% of respondents planned to buy a new home and a fewer 48.5% planned to buy a major appliance.

Confidence amongst survey respondents over age 55 declined 11.6% (-14.4% y/y) in September. The index was down sharply versus its November peak. Confidence amongst respondents aged 35-54 fell 5.7% (-7.7% y/y), off for the third month in the last four. Confidence amongst respondents under age 35 fell 1.6% (+7.7% y/y) after two months of strong gain. Nevertheless, it remained near the record high.

The Consumer Confidence data are 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 Sep Y/Y % 2018 2017 2016
Consumer Confidence Index 125.1 134.2 135.8 -7.5 130.1 120.5 99.8
   Present Situation 169.0 176.0 170.9 -0.2 164.8 144.8 120.3
   Expectations 95.8 106.4 112.4 -14.8 107.0 104.3 86.1
Consumer Confidence By Age Group
   Under 35 Years 151.6 154.0 140.7 7.7 133.7 130.2 122.4
   Aged 35-54 Years 125.1 132.7 142.5 -7.7 132.2 123.5 106.2
   Over 55 Years 112.3 127.1 127.8 -14.4 126.3 112.9 84.6
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