Global| Mar 26 2013U.S. Consumer Confidence: The Bloom Falls Off the Rose
by:Tom Moeller
|in:Economy in Brief
Summary
Following its strength in 2012, consumer confidence has trended lower versus the October high. The Conference Board's March Consumer Confidence Index retreated to 59.7 following a downwardly revised February reading of 68.0. Consensus [...]
Following its strength in 2012, consumer confidence has trended lower versus the October high. The Conference Board's March Consumer Confidence Index retreated to 59.7 following a downwardly revised February reading of 68.0. Consensus expectations had been for 68.7 this month. During the last ten years, there has been a 47% correlation between the level of confidence and the three-month change in real PCE.
A sharp decline in the consumer expectation reading to 60.9 from 72.4 led the overall index lower. A greatly lessened 14.4% of respondents thought that business conditions would improve while just 12.3% thought there would be more jobs. That was the least since October 2011. The expected inflation rate in twelve months rose to 5.9%, its highest in six months and the percentage looking for higher stock prices fell slightly.
The present situations index also declined sharply to 57.9 and has moved sideways since October. A lessened 16.0% of respondents thought that business condition were good. The reading of the labor market continues to improve as only 36.2% thought that jobs were hard to get. That's versus the high of 49.4% in June 2011.
Consumer confidence varied greatly by age group. Those under 35 years old were the most confident, but that confidence has fallen sharply. Middle aged individuals were more confident this month but less so than younger individuals. Those over 55 years remained the least confident about the economy.
| Conference Board (SA, 1985=100) | Mar | Feb | Jan | Y/Y % | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 59.7 | 68.0 | 58.4 | -14.1 | 67.1 | 58.1 | 54.5 |
| Present Situation | 57.9 | 61.4 | 56.2 | 16.0 | 49.8 | 36.1 | 25.7 |
| Expectations | 60.9 | 72.4 | 59.9 | -26.2 | 78.6 | 72.8 | 73.7 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 75.1 | 87.8 | 74.0 | -9.5 | 86.5 | 77.3 | 70.4 |
| Aged 35-54 Years | 62.2 | 67.5 | 58.9 | -11.0 | 68.5 | 59.8 | 55.1 |
| Over 55 Years | 50.1 | 60.1 | 51.6 | -18.5 | 56.6 | 47.3 | 47.4 |
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.
