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Economy in Brief

U.S. Consumer Confidence Improves to Six-Year High
by Tom Moeller  March 25, 2014

Consumers are emerging from a winter funk. Consumer confidence, as measured by the Conference Board, rose to an index reading of 82.3 this month (33.0% y/y) from February's little revised 78.3. The latest figure was the highest since January 2008 and compared to 78.8 in the Action Economics Consensus Forecast. During the last ten years there has been a 45% correlation between the level of confidence and the three-month change in real personal consumption expenditures.

By age group, confidence improved amongst individuals over 55 years old. A 9.7% m/m increase in confidence reversed February's decline and rose to the highest level since last June. For those aged 35-54 years old, confidence improved 8.1% (43.3% y/y) to the highest level since August. Confidence amongst individuals under age 35 declined 5.7% but remained up by nearly one-quarter y/y.

The expectations confidence indicator gained 9.2% (31.1% y/y) to 83.5, its highest level in six months. The present situations reading offset some of that improvement with a 0.7% slip (+35.8% y/y) to 80.4. Business conditions were rated as good by 22.9% of respondents, the highest level since October 2007. Only 18.1%, however, thought they would be better in six months, down from 21.4% who thought so in June. Jobs were viewed as hard to get by a fairly steady 33.0% of respondents, but that was near the expansion low. Only 13.9%, however, thought there would be more jobs in six months. An improved 1.1% of respondents expected to buy a new home in six months and a higher 49.7% were going to buy a major appliance. A much lower 3.7% of respondents planned to buy a new automobile within the next six months. Expectations for the inflation rate in six months moved up m/m to 5.5%, the highest reading since October.

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 % 2013 2012 2011
Consumer Confidence Index 82.3 78.3 79.4 33.0 73.2 67.1 58.1
  Present Situation 80.4 81.0 77.3 35.8 67.6 49.8 36.1
  Expectations 83.5 76.5 80.8 31.1 77.0 78.6 72.8
Consumer Confidence By Age Group
  Under 35 Years 101.2 107.3 99.3 21.6 93.1 86.5 77.3
  Aged 35-54 Years 89.3 82.6 80.2 43.3 76.8 68.5 59.8
  Over 55 Years 69.3 63.2 68.9 33.0 61.2 56.7 47.3
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