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Economy in Brief

U.S. Consumer Confidence Weakens M/M
by Tom Moeller  February 24, 2015

The Conference Board's consumer confidence index deteriorated to 96.4 this month from 103.8 during January, revised from 102.9 (1985=100). Nevertheless, it was the highest level since September 2007. The latest figure remained up by nearly one-quarter y/y but fell short of expectations for 99.0 in the Action Economics Forecast Survey. 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.

A lower expectations figure, off 10.1% (+14.0% y/y), led the way downward. The latest level was the lowest since September. The present situation reading declined 3.2%, but it remained more than one-third higher than the year-ago level.

Business conditions were rated as "good" by an easier 26.0% of respondents. Jobs were viewed as hard to get by a slightly higher 26.2% of respondents, but that remained the fewest since March 2008. Business conditions improvement in six months was expected by a sharply lessened 16.1%; a greatly lessened 13.4% thought there would be more jobs in six months, the least since November 2013. The inflation rate expected in twelve months ticked up to 5.0%, but remained near the recovery low of 4.9%.

By age group, confidence among those under 35 deteriorated sharply but remained up 4.1% versus last year. Confidence amongst individuals aged 35-54 slipped m/m but was at the highest level since August 2007. Amongst those over 55, confidence also slipped but was the highest level since December 2007.

A greatly lessened 0.7% of respondents planned to buy a new home within six months, equaling the fewest since July. An improved 45.8% planned to buy a major appliance within six months, but that remained near the 2011 low. A fairly stable 4.2% planned to buy a new automobile.

The Consumer Confidence data is available in Haver's CBDB database. The total indexes appear in USECON and the market expectations are in AS1REPNA.

The Semiannual Monetary Policy Report to the Congress by Fed Chair Janet L. Yellen is available here.

Conference Board (SA, 1985=100) Feb Jan Dec Y/Y % 2014 2013 2012
Consumer Confidence Index 96.4 103.8 93.1 23.1 86.9 73.2 67.1
  Present Situation 110.2 113.9 99.9 36.0 87.3 67.6 49.8
  Expectations 87.2 97.0 88.5 14.0 86.6 77.0 78.6
Consumer Confidence By Age Group
  Under 35 Years 111.7 126.0 99.4 4.1 106.6 93.1 86.5
  Aged 35-54 Years 102.8 103.6 102.6 24.5 92.4 76.8 68.5
  Over 55 Years 84.7 91.1 83.7 34.0 73.7 61.2 56.7
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