Global| May 30 2017U.S. Consumer Confidence Declines Again
by:Tom Moeller
|in:Economy in Brief
Summary
The Conference Board Consumer Confidence Index fell 1.3% during May (+27.6% y/y) to 117.9, following a little-revised 4.4% April decline to 119.4. The index was at its lowest level in three months. The Action Economics Forecast Survey [...]
The Conference Board Consumer Confidence Index fell 1.3% during May (+27.6% y/y) to 117.9, following a little-revised 4.4% April decline to 119.4. The index was at its lowest level in three months. The Action Economics Forecast Survey looked for a 2.4% decline to 120.0. During the past thirty years, there has been a 70% correlation between the level of consumer confidence and the y/y change in real PCE.
The decline in confidence reflected a 2.7% fall (+30.7% y/y) in the expectations reading to 102.6. The present situation index edged 0.3% higher (24.3% y/y) to 140.7.
The percentage of respondents indicating that business conditions are "good" slipped to 29.4%, while the percentage saying business conditions are "bad" held steady at 13.7%. Respondents stating that jobs are "plentiful" eased to 29.9%. Nevertheless, it remained near the highest percentage since 2001. The percentage claiming jobs are "hard to get" declined to 18.2%, the fewest since February 2007. These changes in views on labor market conditions led to a slightly higher labor market differential (a reliable indicator of the unemployment rate) of 11.7 percentage points, remaining near its 2001 high.
The percentage expecting business conditions to improve over the next six months fell sharply to 21.3%. For labor markets, the percentage expecting more jobs in the months ahead declined to 18.6%, a six month low. The percentage of consumers expecting their incomes to strengthen rose slightly to 19.2%, but also remained near a six month low.
The expected rate of inflation in twelve months held steady at 4.7%. The percentage expecting higher interest rates over the next twelve months fell sharply to 67.5%, the fewest in six months.
Confidence amongst individuals over age 55 fell moderately for a second straight month. Confidence amongst individuals aged 35-to-54 also fell for a second month, but confidence amongst respondents under age 35 reversed the April decline and approached the 2000 high.
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) | May | Apr | Mar | Y/Y % | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Consumer Confidence Index | 117.9 | 119.4 | 124.9 | 27.6 | 99.8 | 98.0 | 86.9 |
| Present Situation | 140.7 | 140.3 | 143.9 | 24.3 | 120.6 | 111.7 | 87.4 |
| Expectations | 102.6 | 105.4 | 112.3 | 30.7 | 86.1 | 88.8 | 86.6 |
| Consumer Confidence By Age Group | |||||||
| Under 35 Years | 135.9 | 128.5 | 135.7 | 23.2 | 122.4 | 116.0 | 106.6 |
| Aged 35-54 Years | 120.4 | 121.7 | 130.0 | 22.2 | 106.2 | 103.9 | 92.4 |
| Over 55 Years | 108.2 | 112.5 | 115.4 | 39.6 | 84.6 | 84.1 | 73.8 |
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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