Global| Jul 31 2018U.S. Consumer Confidence Improves Slightly
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board Consumer Confidence Index during July increased 0.2% (6.2% y/y) to 127.4 from 127.1, initially reported as 126.4. The July level exceeded expectations for 126.0 in the Action Economics Forecast Survey. The level [...]
The Conference Board Consumer Confidence Index during July increased 0.2% (6.2% y/y) to 127.4 from 127.1, initially reported as 126.4. The July level exceeded expectations for 126.0 in the Action Economics Forecast Survey. The level of confidence has been moving sideways since November. The indexes in this report are based on 1985=100. During the past 10 years, there has been a 69% correlation between the level of consumer confidence and the y/y change in real PCE.
The present conditions component increased 2.6% (14.1% y/y) to 165.9. It was the highest level since March 2001. The expectations component declined 2.2% (-1.3% y/) to 101.7, the lowest level since December.
Expectations for business conditions improved m/m as 23.1% of respondents thought that conditions would improve, still down from a 26.9% high in March 2017. Income was expected to increase in six months by a still sharply lessened 20.8%, versus the February high of 23.5%. Expectations that there would be more jobs in six months surged m/m to 22.5%, the highest level since early last year.
Jobs were viewed as "plentiful" by an increased 43.1% of respondents in July. Jobs were viewed as "hard to get" by a steady and low 15.0%, the fewest in seventeen years. The net jobs assessment reading increased to +28.1 in July. It remained near the highest level since 2001. Over the past 15 years, this differential has been 96% inversely related to the unemployment rate. The percentage of respondents indicating the business conditions are "good" rose to a 17-year high of 38.0%. The percentage saying business conditions are "bad" declined to a cycle low 10.1%.
Expectations for the inflation rate in twelve months rose m/m to 5.1%, up from last November's 4.5% low. It was the highest reading since October 2015. The percentage expecting higher interest rates over the next twelve months held fairly steady at 71.1%, but was up sharply from 67.6% in May of last year. Those looking to buy a home in the next six months fell sharply m/m to 5.1%, the lowest level in two years.
Confidence amongst respondents under age 35 years improved sharply to the highest level since May of last year. For those aged 35-54 years, confidence declined m/m to nearly a one year low. And for those over 55 years of age, confidence has been fairly steady this year near the eighteen-year 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) | Jul | Jun | May | Y/Y % | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 127.4 | 127.1 | 128.8 | 6.2 | 120.5 | 99.8 | 98.0 |
| Present Situation | 165.9 | 161.7 | 161.2 | 14.1 | 144.8 | 120.3 | 111.7 |
| Expectations | 101.7 | 104.0 | 107.2 | -1.3 | 104.3 | 86.1 | 88.8 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 137.2 | 127.0 | 129.4 | 5.5 | 130.2 | 122.4 | 116.0 |
| Aged 35-54 Years | 123.5 | 132.0 | 133.0 | 1.1 | 123.5 | 106.2 | 103.9 |
| Over 55 Years | 124.8 | 122.8 | 124.4 | 10.2 | 112.9 | 84.6 | 84.1 |
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.
More Economy in Brief
