Global| May 31 2011U.S. Consumer Confidence Backpedals To Six-Month Low
by:Tom Moeller
|in:Economy in Brief
Summary
Concern about future business conditions is the big worry on consumers' minds this month. The Conference Board reported that its May consumer confidence index fell 7.9% from April to 60.8, the lowest level since November. The latest [...]
Concern about future business conditions is the big worry on consumers' minds this month. The Conference Board reported that its May consumer confidence index fell 7.9% from April to 60.8, the lowest level since November. The latest decline followed an upwardly-revised 3.4% April increase and it contrasted with Consensus expectations for a reading of 66.5. During the last ten years there has been a 48% correlation between the level of confidence and the three-month change in real personal consumption expenditures.
The expectations component of confidence fell a sharp 9.6% from April to the lowest level since October. Expectations for improved business conditions and employment in six months plummeted to the lowest levels since October. Income expectations fell as well. Consumers expected the inflation rate in twelve months to be an increased 6.6%. Interest rates in twelve months were expected to be higher by a stable 56.6% of respondents while just 13.7% expected rates to fall. An increased 35.0% of respondents expected stock prices to rise but that still was down from 37.9% in January.
The present situations component of the consumer confidence index slipped 2.2% after a 7.2% April increase. Jobs were seen as hard to get by an improved 43.9% of respondents, though that remained down from the November high of 48.8%. Business conditions were seen as good by a roughly stable 14.6% of respondents, double the February 2010 low.
The Conference Board data can be found in Haver's CBDB database. The expectation figure is the AS1REPNA database.
| Conference Board (SA, 1985=100) | May | Apr | Mar | Y/Y % | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 60.8 | 66.0 | 63.8 | -3.0 | 54.5 | 45.2 | 57.9 |
| Present Situation | 39.3 | 40.2 | 37.5 | 31.9 | 25.7 | 24.0 | 69.9 |
| Expectations | 75.2 | 83.2 | 81.3 | -11.1 | 73.7 | 59.3 | 50.0 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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