Global| Feb 27 2018U.S. Consumer Confidence Strengthens to 2000 High
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board Consumer Confidence Index increased 5.2% during February (12.7% y/y) to 130.8, following a 1.0% January rise to 124.3, revised from 125.4. It was the highest index level since November 2000. A level of 126.7 had [...]
The Conference Board Consumer Confidence Index increased 5.2% during February (12.7% y/y) to 130.8, following a 1.0% January rise to 124.3, revised from 125.4. It was the highest index level since November 2000. A level of 126.7 had been expected in the Action Economics Forecast Survey. The indexes are based on 1985=100. 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 overall confidence reflected a 5.5% increase (5.6% y/y) in the expectations index to 109.7 after January's 3.2% rise. The present situation index reading rose 5.0% (20.8% y/y) to 162.4 following a 1.2% decline.
The percentage of respondents indicating conditions are "good" was fairly steady at 35.8% this month. The percentage saying business conditions are "bad" declined to 10.8%, the least since March 2001. Job market readings remained firm. Jobs were viewed as "plentiful" by an expansion high, 39.4% of respondents. Jobs were viewed as "hard to get" by 14.7%, also equaling the 2001 low. The net jobs assessment improved to +24.7, the most favorable since May 2001. The differential is 97% inversely related to the unemployment rate.
The increase in the overall expectations reading reflected an increase in the percentage expecting business conditions to improve over the next six months. It surged to 25.8% from 21.5% in January. Those expecting more jobs increased to 21.6%, though that was down from the 23.8% expansion high reached during March of last year. Incomes are expected to improve by 23.8% of respondents, up from the full-year 2009 low of 9.9%.
Expectations for the inflation rate in twelve months ticked higher to 4.7% and has been fairly stable since the 4.8% low during all of 2016.The percentage expecting higher interest rates over the next twelve months increased to 70.4%, the most since April 2017, and up from the July 2016 low of 52.3%. Those looking to buy a home in the next six months remained depressed at 6.3%, down from December's high of 7.4%.
By age group, confidence increased the most among individuals over age 55, up 17.5% y/y. Confidence amongst those aged 35-54 gained 15.0% y/y, while younger respondents, under age 35, saw confidence improve 6.1% y/y.
The Consumer Confidence data is available in Haver's CBDB database. The total indexes appear in USECON, and the market expectations are in AS1REPNA.
Semiannual Monetary Policy Report to the Congress from Fed Chairman Jerome H. Powell is available here.
| Conference Board (SA, 1985=100) | Feb | Jan | Dec | Y/Y % | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 130.8 | 124.3 | 123.1 | 12.7 | 120.5 | 99.8 | 98.0 |
| Present Situation | 162.4 | 154.7 | 156.5 | 20.8 | 144.8 | 120.3 | 111.7 |
| Expectations | 109.7 | 104.0 | 100.8 | 5.6 | 104.3 | 86.1 | 88.8 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 127.9 | 128.3 | 128.7 | 6.1 | 130.2 | 122.4 | 116.0 |
| Aged 35-54 Years | 135.7 | 127.3 | 126.3 | 15.0 | 123.5 | 106.2 | 103.9 |
| Over 55 Years | 128.7 | 119.0 | 116.5 | 17.5 | 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.
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