U.S. Consumer Confidence Improves Further

Improvement in consumers' mood continued this month according to the Conference Board. Their consumer confidence index rose 10.7% m/m to 57.9, its highest level since September 2008. The gain handily outpaced the Consensus expectation for a rise to 53.5. During the last ten years there has been an 86% correlation between the level of consumer confidence and the y/y change in real consumer spending. The Conference Board data can be found in Haver's CBDB database.

Consumers' assessment of the present situation jumped 13.5% m/m after a similar March rise, off a near-record low. Jobs were seen as hard to get by a reduced 45.0% of respondents but jobs were seen as plentiful by only 4.8%. That was up just slightly from the series' historic low reached in November. Also improved was the percentage of respondents who saw business conditions as good. The percentage of consumers who thought business conditions were bad fell to 40.2%, off ten points from its peak during the recession.

The expectations component of confidence also improved m/m to its highest level just before the recession. Improved expectations for employment led the gain but expectations for business conditions and income rose just slightly. Expectations for the inflation rate in twelve months slipped to 5.3% and that remained down from last year's high of 7.7%. Interest rates in twelve months were expected to be higher by an increased 56.3%, the highest since 2007. A much-reduced 12.2% expected rates to fall. An increased 35.0% of respondents expected stock prices to rise. That was near the recent high.

A reduced 2.0% of those surveyed plan to buy a home during the next six months. An improved 27.4% plan to buy a major appliance, though 30.9% planned to buy one back in 2007. An improved 5.1% plan to buy an automobile versus 6.0% in 2007 and a greater 2.3% plan to buy a new one, just off the series' historic low.