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Economy in Brief
May JOLTS: Openings, Hiring Slipped, Separations Edged Up
Job openings fell 427,000 in May to 11.254 million...
Euro Area Retail Sales Remain Weak
The graph shows the clear trend of euro area retail sales...
U.S. Factory Orders Rise More Than Expected in May
Total factory orders rose 1.6% m/m (14.0% y/y) in May...
Composite PMIs Step Back But Most Still Show Expansion
The S&P global composite PMIs took a turn for the worse in June...
U.S. ISM Manufacturing Index Falls Back in June to the Lowest Level in Two Years
The ISM U.S. manufacturing PMI fell to 53.0 in June...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller May 26, 2020
• Expectations for business conditions improve moderately.
• Assessment of current activity weakens further.
• Age groups exhibit mixed feelings.
The Conference Board's Index of Consumer Confidence rose 1.1% (-34.0% y/y) this month to 86.6 following a 27.9% decline during April, revised from -26.9%. Despite the recent gain, the index remained near the lowest level of confidence since June 2014. A decline to an index level of 85.0 had been expected in the Action Economics Forecast Survey. Over the last 20 years, there has been a 60% correlation between the level of confidence and the y/y change in real consumer spending.
The index of expected business conditions in six months rose 2.8%, following an 8.6% rise in April. An improved 43.3% of respondents felt that would business conditions would improve, up from the low of 18.7% in March. Thirty-nine percent of respondents felt that there would be more jobs in six months, down slightly from April but up from 16.9% in March. These gains did not, however, translate into improved earnings expectations. A still declining 14.0% of respondents felt that income would improve.
The index of current conditions fell 2.6% to the lowest level since August 2013. A greatly lessened 16.3% of respondents felt that business conditions were good, down from 39.2% in March. Jobs were viewed as hard to get by 28% of respondents, down a bit from April but still higher than 13.8% in March.
Expectations for the inflation rate in twelve months surged to 6.2% and added to April's increase from 4.5% in March. It was the highest level since March 2012, up from 4.5% this past March. Interest rates were expected to move higher in twelve months by 37.4% of respondents, up slightly from April but still nearly half the 2018 high. A greatly lessened 0.7% planned to buy a new home, down from the recent high of 2.0% in March. An improved 4.5% planned to buy a new car within six months while 46.9% planned to buy a major appliance, down from February's high of 55.0%.
By age group, the index of confidence amongst those under age 35 eroded 19.8% (-34.8% y/y) compared to improvement amongst older individuals. For respondents aged 35-54, confidence improved 5.3% (-34.1% y/y). For those over age 55, confidence gained 5.6% (-34.9% y/y).
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, % Chg.) | May | Apr | Mar | May Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Consumer Confidence Index | 1.1 | -27.9 | -10.4 | -34.0 | -1.4 | 8.0 | 20.7 |
Present Situation | -2.6 | -56.2 | -1.5 | -58.3 | 3.1 | 13.8 | 20.3 |
Expectations | 2.8 | 8.6 | -19.7 | -7.7 | -6.0 | 2.6 | 21.1 |
Consumer Confidence By Age Group | |||||||
Under 35 Years | -19.8 | -23.9 | -6.7 | -34.8 | 0.3 | 2.7 | 6.4 |
Aged 35-54 Years | 5.3 | -28.6 | -11.0 | -34.1 | -1.1 | 7.0 | 16.4 |
Over 55 Years | 5.6 | -29.2 | -10.8 | -34.9 | -1.9 | 11.8 | 33.5 |