Global| Mar 28 2017U.S. Consumer Confidence Improves Significantly
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board Consumer Confidence Index for March strengthened 8.2% (30.7% y/y) to 125.6, the highest level since December 2000. February's level was revised higher to 116.1 from 114.8. The Action Economics Forecast Survey [...]
The Conference Board Consumer Confidence Index for March strengthened 8.2% (30.7% y/y) to 125.6, the highest level since December 2000. February's level was revised higher to 116.1 from 114.8. The Action Economics Forecast Survey looked for a decline to 113.6. 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 rise in confidence reflected a 9.5% gain (36.1% y/y) in the expectations reading to 113.8 from 103.9. The present situation reading increased 6.5% (24.5% y/y) to 143.1 from 134.4.
The percentage of respondents indicating that business conditions are "good" strengthened to 30.7%, while those saying business conditions are "bad" fell to 12.9%. Respondents stating that jobs are "plentiful" surged to 31.7%, the highest percentage since August 2001, while those claiming jobs are "hard to get" eased to 19.5%. This change in views on labor market conditions led to a strengthened labor market differential (a reliable indicator of the unemployment rate) of 12.2 percentage points, which also was the highest level since 2001.
The percentage expecting business conditions to improve over the next six months surged to a roughly fourteen year high of 27.1%. For labor markets, the percentage expecting more jobs in the months ahead rose to 24.8% and surpassed its 1983 peak. The percentage of consumers expecting their incomes strengthened to 21.5% and equaled the recent high in December.
The expected rate of inflation in twelve months declined to 4.6%, a three-month low. The percentage expecting higher interest rates over the next twelve months rose to an expansion high of 72.3%.
The rise in the headline confidence index was paced by greatly improved optimism amongst individuals over age 55. Confidence amongst individuals aged 35-to-54 also strengthened. Respondents under age 35 registered a rise in confidence that remained slightly below the recent high.
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) | Mar | Feb | Jan | Y/Y % | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 125.6 | 116.1 | 111.6 | 30.7 | 99.8 | 98.0 | 86.9 |
| Present Situation | 143.1 | 134.4 | 130.0 | 24.5 | 120.6 | 111.7 | 87.4 |
| Expectations | 113.8 | 103.9 | 99.3 | 36.1 | 86.1 | 88.8 | 86.6 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 137.1 | 120.6 | 129.2 | 10.9 | 122.4 | 116.0 | 106.6 |
| Aged 35-54 Years | 129.3 | 118.0 | 114.2 | 27.5 | 106.2 | 103.9 | 92.4 |
| Over 55 Years | 116.5 | 109.5 | 101.2 | 45.4 | 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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