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Economy in Brief

U.S. Consumer Confidence Unexpectedly Jumps
by Tom Moeller  August 25, 2015

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
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