Global| Aug 28 2012U.S. Consumer Confidence Falls Sharply
by:Tom Moeller
|in:Economy in Brief
Summary
Consumers' confidence about the future has turned sour. In fact, lower expectations for the next six months helped push the Conference Board's Consumer Confidence Index for August down by 7.3% m/m to 60.6 from 65.4 in July, initially [...]
Consumers' confidence about the future has turned sour. In fact, lower expectations for the next six months helped push the Conference Board's Consumer Confidence Index for August down by 7.3% m/m to 60.6 from 65.4 in July, initially reported as 65.9. Consensus had been looking for an August reading of 66.0. 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, by itself, fell 10.1% to 70.5 which was its lowest level since November. A diminished 16.5% of respondents thought business conditions would be better six months hence. Also lower were the 15.4% who thought there would be more jobs and the 15.7% who expected higher income.
Consumers' reading of the present situation fell minimally m/m to 45.8 but still was up one third y/y. An improved 15.2% saw business conditions as good while a slightly lower 40.7% reported that jobs were hard to get.
Expectations for inflation in the next twelve months rose m/m to 5.9%, its highest level since March. The percentage of people looking for higher stock prices ticked up to 26.8% this month but the percent who are bearish also rose. The percentage of respondents planning to buy a home within six months rose to its highest level this year and the percent planning to buy a major appliance held high and steady.
Headline figures on consumer confidence are carried in Haver's USECON database. The Conference Board's detailed data are found in Haver's CBDB database, and the consensus expectations figure is from Actions Economics, as tabulated in the AS1REPNA database.
| Conference Board (SA, 1985=100) | Aug | Jul | Jun | Y/Y % | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 60.6 | 65.4 | 62.7 | 34.1 | 58.1 | 54.5 | 45.2 |
| Present Situation | 45.8 | 45.9 | 46.6 | 33.5 | 36.2 | 25.7 | 24.0 |
| Expectations | 70.5 | 78.4 | 73.4 | 34.5 | 72.8 | 73.7 | 59.3 |
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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