Consumer Confidence Highest Since Recession
The latest Conference Board Consumer Confidence Index was released this morning based on data collected through September 15. The headline number of 104.1 was an increase from the final reading of 101.8 for August, an upward revision from 101.1. Today's number was substantially above the Investing.com consensus of 99.0. This is the highest since August 2007.
You may also like Charles Bolin's September Investment Outlook
Here is an excerpt from the Conference Board press release.
"Consumer confidence increased in September for a second consecutive month and is now at its highest level since the recession," said Lynn Franco, Director of Economic Indicators at The Conference Board. "Consumers’ assessment of present-day conditions improved, primarily the result of a more positive view of the labor market. Looking ahead, consumers are more upbeat about the short-term employment outlook, but somewhat neutral about business conditions and income prospects. Overall, consumers continue to rate current conditions favorably and foresee moderate economic expansion in the months ahead."
Putting the Latest Number in Context
The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.
On a percentile basis, the latest reading is at the 70th percentile of all the monthly data points since June 1977, up from the 65th percentile the previous month.
For an additional perspective on consumer attitudes, see the most recent Reuters/University of Michigan Consumer Sentiment Index. Here is the chart from that post.
And finally, let's take a look at the correlation between consumer confidence and small business sentiment, the latter by way of the National Federation of Independent Business (NFIB) Small Business Optimism Index. As the chart illustrates, the two have tracked one another fairly closely since the onset of the Financial Crisis, although a bit of spread has appeared in the second half of 2015 and start of 2016.
About Jill Mislinski
Jill Mislinski Archive
|01/24/2017||Existing-Home Sales for 2016 Best in Decade||story|
|01/10/2017||Wow! Small Business Optimism Spikes to the Highest Level in 10 Years||story|
|01/06/2017||ECRI Weekly Leading Index Reaches Another New High||story|
|01/03/2017||ISM Manufacturing Index: December PMI Highest in Two Years||story|
|12/29/2016||Weekly Unemployment Claims: Down 10K||story|
|12/21/2016||Housing Affordability in Today's Largest Cities||story|
|12/16/2016||ECRI Weekly Leading Index Highest Since 2010||story|
|12/13/2016||Small Businesses Are Very Happy About Trump||story|
|12/06/2016||US Service Sector Rebounds in November; Majority of Businesses Positive on Direction of Economy||story|
|11/29/2016||Home Prices Rose 5.1% Year-over-Year, Gains Continue in September||story|