Global| Aug 25 2015U.S. Consumer Confidence Unexpectedly Jumps
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board's Consumer Confidence Index recovered 11.5% this month (8.7% y/y) to 101.5 from a little-revised 91.0 in July. The reading was the highest since January and beat expectations for 93.0 in the Action Economics [...]
The Conference Board's Consumer Confidence Index recovered 11.5% this month (8.7% y/y) to 101.5 from a little-revised 91.0 in July. The reading was the highest since January and beat expectations for 93.0 in the Action Economics Survey. During the last ten years, there has been a 43% correlation between the level of confidence and the three-month change in real personal consumption expenditures.
The present situations figure improved 10.7% to 115.1 (22.6% y/y), reaching the highest level since November 2007. The consumer expectations component recovered July's decline with a 12.4% rise to 92.5 (-0.6% y/y).
Respondents indicating that business conditions were good fell to 23.2%, the least since May of last year. The percentage reporting that jobs were not plentiful jumped to 56.2%, the most since the recession. Jobs were viewed as hard to get by 21.9% of respondents, a new low for the expansion.
The percentage indicating that business conditions would get better notched up while many fewer thought they would worsen. The same pattern was viewed for the job market. A slightly lesser 60.3% expected higher interest rates in twelve months and a greatly lessened 31.0% expected higher stock prices. A sharply reduced 4.1% expected to buy a home within six months, the least in over two years and the percentage which planned to purchase a major appliance eased.
The expected inflation rate in twelve months fell to 4.9%, equaling the lowest level since 2010.
A significant increase in confidence was expressed by those under age 35. Respondents between the ages of 35 and 54 also reported a rise in confidence as did individuals in the older age bracket.
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 % | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 101.5 | 91.0 | 99.8 | 8.7 | 86.9 | 73.2 | 67.1 |
| Present Situation | 115.1 | 104.0 | 110.3 | 22.6 | 87.3 | 67.6 | 49.8 |
| Expectations | 92.5 | 82.3 | 92.8 | -0.6 | 86.6 | 77.0 | 78.6 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 123.0 | 98.1 | 112.7 | 11.4 | 106.6 | 93.1 | 86.5 |
| Aged 35-54 Years | 109.7 | 98.9 | 104.5 | 9.2 | 92.4 | 76.8 | 68.5 |
| Over 55 Years | 87.6 | 82.2 | 89.2 | 8.6 | 73.8 | 61.2 | 56.7 |
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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