The Consumer Confidence Index as reported by the Conference Board rose in December and the November results were revised upwards. The composite rose from 91.0 to 92.6, the view of the present situation rose from 93.7 to 98.6 as expectations fell from 89.3 to 88.5. The three month moving averages (3MMA) of the composite and present view and expectations all improved. The 3MMA of the composite at 92.6 is now higher than the 35 year average since 1980 which stands at 90.6, the 3MMA of the composite, the view of the present situation and expectations are shown in Figure 1.
As with other indicators such as job creation, the recovery from the last recession has been slower than for previous recoveries. The present situation component has been much more volatile over each multiyear time span than expectations since our data began 34 years ago with higher highs and lower lows. The view of the present situation moved ahead of that for expectations in October for the first time since the recovery began in 2009. If history continues to repeat itself, the view of the present situation will now move ahead and widen the differential between it and expectations. On a year over year basis using a 3MMA the composite is up by 18.6 led by consumer’s view of the present situation which is up by 22.0 (Table 1).
The employment sub-indexes, job availability and wage expectations, continue to improve. The pattern (color code) of auto, housing and appliance purchase intentions were unchanged for six months May through October but changed in November when automobiles became negative and appliances became positive. May was the first time in over a year that housing had been negative, and it has remained so ever since.
The official statement from the Conference Board reads as follows:
The Conference Board Consumer Confidence Index Bounces Back
NEW YORK, Dec. 30, 2014 /PRNewswire/ — The Conference Board Consumer Confidence Index, which had declined in November, improved in December. The Index now stands at 92.6 (1985=100), up from 91.0 in November. The Present Situation Index rose to 98.6 from 93.7, while the Expectations Index decreased to 88.5 from 89.3 in November.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was December 16.
Says Lynn Franco, Director of Economic Indicators at The Conference Board, “Consumer confidence rebounded modestly in December, propelled by a considerably more favorable assessment of current economic and labor market conditions. As a result, the Present Situation Index is now at its highest level since February 2008 (Index, 104.0). Consumers were moderately less optimistic about the short-term outlook in December, but even so, they are more confident at year-end than they were at the beginning of the year.”
Consumers’ appraisal of current conditions was considerably more favorable in December. Those saying business conditions are “good” was unchanged at 24.8 percent, while those claiming business conditions are “bad” decreased from 21.8 percent to 19.6 percent. Consumers were also more positive in their assessment of the job market, with the proportion stating jobs are “plentiful” increasing from 16.2 percent to 17.1 percent, and those claiming jobs are “hard to get” decreasing from 28.7 percent to 27.7 percent.
Consumers’ optimism about the short-term outlook eased moderately in December. The percentage of consumers expecting business conditions to improve over the next six months edged down from 18.3 percent to 18.0 percent, but those expecting business conditions to worsen declined slightly from 10.4 percent to 10.1 percent. Consumers’ outlook for the labor market was marginally less optimistic. Those anticipating more jobs in the months ahead decreased from 15.5 percent to 14.7 percent, while those anticipating fewer jobs rose from 16.1 percent to 16.9 percent. The proportion of consumers expecting growth in their incomes declined moderately from 16.9 percent to 16.4 percent; however the proportion expecting a decrease also declined, from 11.0 percent to 10.0 percent.
About The Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.
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