Global| Aug 29 2017U.S. Consumer Confidence Improves Markedly
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board Consumer Confidence Index strengthened 2.4% during August to 122.9 following a 2.3% July rise, revised from 3.2%. The index was just below its recent peak in March and neared the highest level since December 2000. [...]
The Conference Board Consumer Confidence Index strengthened 2.4% during August to 122.9 following a 2.3% July rise, revised from 3.2%. The index was just below its recent peak in March and neared the highest level since December 2000. The Action Economics Forecast Survey looked for a lesser increase to 120.0. During the past thirty years, there has been a 70% correlation between the level of consumer confidence and the y/y change in real PCE.
The increase in confidence reflected a 4.0% gain (20.7% y/y) in the present situation index to 151.2, its highest level since July 2001. The expectations reading increased 1.0% (20.8% y/y) to 104.0, its highest level since April.
The percentage of respondents indicating that business conditions are "good" surged to 34.5%, the highest level since January 2001. The percentage saying business conditions are "bad" matched the recovery low of 13.1%. The 35.4% of respondents saying that jobs are "plentiful" was the most since July 2001. The percentage claiming jobs are "hard to get" declined to a sixteen year low of 17.3%. These improved views of labor market conditions led to a labor market differential (plentiful minus hard to get) of 18.1 percentage points. This differential is 97% inversely related to the unemployment rate.
The percentage expecting business conditions to improve over the next six months declined to 19.6%, and remained well below its 26.9% March peak. The percentage expecting more jobs in six months declined to 17.1%, a nine month low and well below the 23.8% March peak. The percentage expecting their incomes to strengthen improved slightly to 20.9%, but remained below the March high.
The expected rate of inflation in twelve months declined to 4.5% and roughly equaled the 12-year low. The percentage expecting higher interest rates over the next twelve months fell to 64.8%, down from a March high of 72.2%, while 6.4% expected to buy a home, down slightly from the recent high.
Confidence amongst individuals over age 55 reached a new high for the cycle. Confidence amongst individuals aged 35-to-54 also improved moderately. Confidence amongst respondents under age 35 also rose following a sharp decline in July.
The Consumer Confidence data is available in Haver's CBDB database. The total indexes appear in USECON, and the market expectations are in AS1REPNA
| Conference Board (SA, 1985=100) | Aug | Jul | Jun | Y/Y % | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 122.9 | 120.0 | 117.3 | 20.7 | 99.8 | 98.0 | 86.9 |
| Present Situation | 151.2 | 145.4 | 143.9 | 20.7 | 120.6 | 111.7 | 87.4 |
| Expectations | 104.0 | 103.0 | 99.6 | 20.8 | 86.1 | 88.8 | 86.6 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 134.8 | 130.0 | 136.7 | 10.0 | 122.4 | 116.0 | 106.6 |
| Aged 35-54 Years | 123.6 | 122.2 | 120.7 | 9.4 | 106.2 | 103.9 | 92.4 |
| Over 55 Years | 115.6 | 113.3 | 107.5 | 36.8 | 84.6 | 84.1 | 73.8 |
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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