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Economy in Brief
U.S. Mortgage Applications Continued to Rise, but only Slightly
The Mortgage Bankers Association reported that mortgage applications edged up 0.7% w/w...
Globally Money Supply Slows or Contracts in Real Terms
Money supply trends show that slowing is widespread across the major monetary center countries...
U.S. Consumer Confidence Deteriorates Further in June
The Conference Board's Consumer Confidence Index weakened 4.4% (-23.4% y/y) in June...
U.S. FHFA House Prices Continued to Rise in April
The FHFA House Price Index increased 1.6% during April...
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The advance estimate of the U.S. international trade deficit in goods narrowed to $104.3 billion in May...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller July 28, 2020
• Worries about the future emerge.
• Reading of current conditions continues to increase.
• All age groups become less confident.
Consumer confidence weakened in July, according to the Conference Board. The Index of Consumer Confidence fell 5.8% (-31.8% y/y) to a level of 92.6 from a June level of 98.3. Despite the decline, confidence was 8.1% improved versus its April low, but down roughly one-third y/y. A decline to an index level of 95.0 had been expected in the Action Economics Forecast Survey. Over the last 25 years, there has been a 58% correlation between the level of confidence and the y/y change in real consumer spending.
The index of expected business conditions in six months fell 13.8%, following an 8.7% rise in June. A greatly lessened 31.6% of respondents felt that would business conditions would improve, down from 42.5% in May. Thirty-one percent of respondents felt that there would be more jobs in six months, down from 41.2% in April. Only a steady 15.1% thought that income would increase.
The index of current conditions improved 8.7% after surging 26.8% in June. Nevertheless, it remained down 44.9% y/y. A steady 17.3% of respondents felt that business conditions were good, but a higher 39.1% felt that they were bad. Jobs were viewed as plentiful by 21.3% of respondents, half of those who felt so in June 2019. Jobs were viewed as hard to get by a greatly lessened 20.0% of respondents, down from 34.5% in April.
Expectations for the inflation rate in twelve months eased to 6.1%. It remained, however, well above the 4.4% rate expected six months ago. Interest rates were expected to move higher in twelve months by a lessened 38.1% of respondents, half of 2018's expectations. A greatly lessened 1.0% planned to buy a new home. A steady 3.9% planned to buy a new car within six months, while a greatly lessened 43.5% 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 fell a sharp 17.7% (-32.6% y/y) followed by deterioration in other age groups. For respondents aged 35-54, confidence fell 3.3% (-35.9% y/y). For those aged 55 and over, confidence weakened 3.4% (-27.7% 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.) | Jul | Jun | May | Jul Y/Y | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Consumer Confidence Index | -5.8 | 14.4 | 0.2 | -31.8 | -1.4 | 8.0 | 20.7 |
Present Situation | 8.7 | 26.8 | -6.3 | -44.9 | 3.1 | 13.8 | 20.3 |
Expectations | -13.8 | 8.7 | 3.5 | -18.6 | -6.0 | 2.6 | 21.1 |
Consumer Confidence By Age Group | |||||||
Under 35 Years | -17.7 | 32.1 | -10.7 | -32.6 | 0.3 | 2.7 | 6.4 |
Aged 35-54 Years | -3.3 | 8.1 | 3.3 | -35.9 | -1.1 | 7.0 | 16.4 |
Over 55 Years | -3.4 | 14.5 | 2.5 | -27.7 | -1.9 | 11.8 | 33.5 |