Global| Jul 26 2011U.S. Consumer Confidence Improves
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board reported that its July Index of Consumer Confidence rose 3.3% to 59.5. The gain recovered roughly half of the June decline which was deeper than reported initially. The latest figure beat Consensus expectations [...]
The Conference Board reported that its July Index of Consumer Confidence rose 3.3% to 59.5. The gain recovered roughly half of the June decline which was deeper than reported initially. The latest figure beat Consensus expectations for a reading of 56.0. During the last ten years there has been 45% correlation between the level of confidence and the three-month change in real personal consumption expenditures.
The expectations component of confidence rose 5.3% from June and recovered most of that month's decline. Expectations for improved business conditions and employment in six months made up the June declines but still were near the lowest levels since early last year. Income expectations also recovered. The turn in oil prices and the weak economy probably caused consumers to expect the inflation rate in twelve months to fall to 5.7%, the lowest since February. However, interest rates in twelve months were expected to be higher by 53.0% of respondents while just 12.6% expected rates to fall. A somewhat improved 29.5% of respondents expected stock prices to rise and a lessened 37.0% expected decline. A higher 4.9% planned to buy a home within six months.
The present situations component of the consumer confidence index fell 2.5% to 35.7 for the third consecutive monthly decline. Jobs were seen as hard to get by a higher 44.1% of respondents but remained down from the November high of 48.8%. Business conditions were seen as good by a reduced 13.4% of respondents, double the February 2010 low, while 39.0% saw them as bad.
The Conference Board data can be found in Haver's CBDB database. The expectation figure is the AS1REPNA database.
| Conference Board (SA, 1985=100) | Jul | Jun | May | Y/Y % | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 59.5 | 57.6 | 61.7 | 16.7 | 54.5 | 45.2 | 57.9 |
| Present Situation | 35.7 | 36.6 | 39.3 | 35.2 | 25.7 | 24.0 | 69.9 |
| Expectations | 75.4 | 71.6 | 76.7 | 11.7 | 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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