Global| Jan 29 2013U.S. Consumer Confidence Continues Lower
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board's Consumer Confidence Index for January dropped sharply to 58.6 from 66.7 in December, revised from 65.1. The latest figure was the lowest since November 2011. Consensus expectations had been for a little-changed [...]
The Conference Board's Consumer Confidence Index for January dropped sharply to 58.6 from 66.7 in December, revised from 65.1. The latest figure was the lowest since November 2011. Consensus expectations had been for a little-changed 65.0 for this month. During the last ten years, there has been a 47% correlation between the level of confidence and the three-month change in real PCE.
The expectations component dropped 12.6% to 57.3 which was its lowest level since October 2011. A diminished 15.4% thought business conditions would be better in six months. Also, much-reduced 14.3% thought there would be more jobs while a lessened 13.6% expected higher income. Consumers' reading of the present situation fell to 57.3, down from its December high. Confidence in the labor market fell sharply as a lessened 8.6% reported that jobs were plentiful. An increased 37.7% thought that jobs were hard to get. A lessened 16.7% asserted that business conditions were good.
Expectations for inflation in the next twelve months ticked up to 5.7% and remained higher than the June low of 5.3%. The percentage of people looking for higher stock prices rose to 31.2% this month, while the percent who are bearish fell moderately. The percentage of respondents planning to buy a home within six months fell to 0.9%, but the percent planning to buy a major appliance rose slightly.
Consumer confidence varied greatly by age group. Those under 35 years old tended to be the most confident, but that confidence is diminishing. Middle aged individuals also were somewhat less confident but those over 55 years were the least confident about the economy.
| Conference Board (SA, 1985=100) | Jan | Dec | Nov | Y/Y % | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 58.6 | 66.7 | 71.5 | -4.7 | 67.1 | 58.1 | 54.5 |
| Present Situation | 57.3 | 64.6 | 57.4 | 47.7 | 49.8 | 36.1 | 25.7 |
| Expectations | 59.5 | 68.1 | 80.9 | -22.4 | 78.6 | 72.8 | 73.7 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 76.6 | 94.8 | 96.5 | 0.4 | 86.5 | 77.3 | 70.4 |
| Aged 35-54 Years | 58.7 | 65.9 | 72.5 | -3.9 | 68.5 | 59.8 | 55.1 |
| Over 55 Years | 50.8 | 53.6 | 60.1 | -5.9 | 56.6 | 47.3 | 47.4 |
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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