Consumer Confidence Retreats During February

February 25, 2014 by · Leave a Comment 

Consumer confidence in the U.S. fell more than forecast in February as Americans grew more pessimistic about the outlook for the economy and employment.

Bloomberg reported that the Conference Board’s index decreased to 78.1 from a revised 79.4 in January that was weaker than initially estimated, the New York-based private research group reported today (Feb. 25). The median forecast in a Bloomberg survey of economists called for a reading of 80.

The share of Americans who said business conditions would improve in the next six months declined to a four-month low. Bigger gains in payrolls and wages would help the economy recover from colder temperatures and snowstorms that weighed on growth at the start of the year.

“The biggest thing that’ll help is if income growth was accelerating, which means you’d need a stronger labor market and more jobs being created,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, said before the report. “On both counts we’ve had some progress, but certainly not enough to make people enthusiastic about their prospects.”

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January Consumer Confidence At 5-Month High

January 29, 2014 by · Leave a Comment 

U.S. consumer confidence has risen to its highest point since August on the strength of a brighter view of the job market and business conditions.

The Associated Press reported that the Conference Board, a business research group, said its consumer confidence index rose to 80.7 in January from a December reading of 77.5. It was the second consecutive strong gain.

“Confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum in the months ahead,” said Conference Board economist Lynn Franco.

Consumer confidence is closely watched because consumer spending accounts for 70% of U.S. economic activity.

Amna Asaf, an economist at Capital Economics, said the January improvement was encouraging given the unseasonably cold weather during the month. She said it probably reflected the strong stock market gains that were occurring during the survey period, which ended on Jan. 16.

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Consumer Confidence Gets Boost for December

December 31, 2013 by · Leave a Comment 

Consumer confidence in the U.S. climbed more than projected in December as Americans’ views of current economic conditions jumped to the highest level since April 2008.

Bloomberg reported that the Conference Board’s index rose to 78.1 from a revised 72 a month earlier that was stronger than initially estimated, the New York-based private research group said today. The median forecast in a Bloomberg survey called for a gain to 76.

Americans are growing upbeat about the economy as household finances improve on the heels of more hiring, rising property values and stock-market gains. Increased optimism along with greater wealth will help underpin the consumer spending that makes up almost 70% of the economy, providing a boost to the expansion.

“The consumer will continue to do some of the heavy lifting for the economy,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The job market is better. Stock prices are rising. The odds of another round of political brinksmanship are lower.”

Estimates of 59 economists in the Bloomberg survey ranged from 71 to 81.2 after a previously reported November reading of 70.4. The index averaged 53.7 in the recession that ended in June 2009.


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Consumer Sentiment Falls More than Expected

October 25, 2013 by · Leave a Comment 

U.S. consumer sentiment dropped in October to its lowest level since the end of last year as consumers worried congressional dysfunction and the resulting partial shutdown of the federal government would hurt growth, a survey released on Friday (Oct. 25) showed.

The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment fell to 73.2 in October from 77.5 in September and was the lowest final reading since December 2012.

Reuters reported that the October figure was lower than both the 75.0 forecast by economists in a Reuters poll and the mid-month preliminary reading of 75.2.

“Not too pretty but not a disaster after all,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York. Fiscal fights in Congress “took their toll,” with a drumbeat of negative news eroding sentiment.

The federal government shut down for 16 days in the first half of October as Republicans in Congress sought to undermine President Barack Obama’s signature health care law as a condition of funding the government.

The government also came close to breaching its borrowing limit, which compounded the crisis and could have pushed the country closer to a historic debt default.

While a last-minute agreement averted that outcome by raising the debt ceiling until early next year, rating agency Fitch warned it could still cut the U.S. sovereign credit rating because of the political brinkmanship.

“When asked to describe in their own words what they had heard about recent economic developments, the number of consumers that negatively mentioned the federal government in October was the highest in the more than half-century history of the surveys,” survey director Richard Curtin said in a statement.

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Washington Weighing on Consumer Sentiment

October 11, 2013 by · Leave a Comment 

U.S. consumer sentiment deteriorated in October to its weakest level in nine months as the first federal government shutdown in 17 years undermined Americans’ outlook on the economy, a survey released on Friday (Oct. 11) showed.

The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment fell to 75.2 in October, down from 77.5 in September. According to a Reuters report, this was the lowest figure since January.

The early October reading fell short of the 76.0 forecast by economists recently polled by Reuters.

While the sentiment gauge declined for a third straight month, the size of the decrease was relatively small, as worries about a protracted shutdown were mitigated by some optimism about income and inflation, survey director Richard Curtin said.

“Consumer confidence posted a surprisingly small decline in early October despite widespread awareness of the government shutdown,” Curtin said in a statement.

“The muted response may be due to consumers giving progressively less credence to the economic scare tactics that have framed the debates over the past few years,” he said.

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Report: Consumer Sentiment Dips in September

September 24, 2013 by · Leave a Comment 

Americans’ confidence in the economy fell slightly in September from August, as many became less optimistic about hiring and pay increases over the next six months.

The Associated Press reported that the Conference Board, a New York-based private research group, said Tuesday that its consumer confidence index dropped to 79.7 in September. That’s down from August’s reading of 81.8, which was slightly higher than previously estimated.

Consumers’ confidence is closely watched because their spending accounts for 70% of economic activity. The September reading was only slightly below June’s reading of 82.1, the highest in 5 ½ years.

While confidence has bounced back from the depths of the Great Recession, it has yet to regain a reading of 90 that typically coincides with a healthy economy.

In September, confidence fell on a dimmer outlook for the next few months. Lynn Franco, who oversees the survey, said that reflected concerns about the job market and wages. Consumers were actually more optimistic about present conditions.

“While overall economic conditions appear to have moderately improved, consumers are uncertain that the momentum can be sustained in the months ahead,” Franco said.

Recent data suggest economic growth may be slowing. Consumers spent more cautiously in August as their income barely grew. And higher interest rates are threatening to slow home sales, just as many markets are starting to recover.

The economy added 169,000 jobs in August, a modest gain but hardly enough to signal robust job growth. The U.S. unemployment rate fell to 7.3% from 7.4%. But the decline was mostly because more people stopped looking for work and were no longer counted as unemployed.

A weaker outlook for the rest of the year was a key reason the Federal Reserve decided last week to hold off on slowing its $85-billion-a-month in bond purchases. The bond purchases have kept longer-term interest rates low, making mortgages and other consumer loans more affordable. Many economists believe the Fed won’t reduce the bond purchases until December at the earliest.

The economy has been held back this year by tax hikes, federal spending cuts and weaker global growth. It expanded at an annual rate of 2.5% in the April-June quarter. But many economists say growth is slowing in the July-September quarter to an annual rate of 2% or less.

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Report: Consumer Confidence Edges up in Aug.

August 27, 2013 by · Leave a Comment 

Confidence among U.S. consumers unexpectedly increased in August as Americans grew more optimistic about the prospects for the world’s largest economy.

Bloomberg reported that the Conference Board’s index of sentiment advanced to 81.5 from a revised 81 the prior month that was stronger than initially estimated, the New York-based private research group reported today. The median forecast in a Bloomberg survey of economists was 79.

Sustained job growth and increased wealth tied to higher home values and stock portfolios are helping to sustain the household spending, boosting automakers and home-improvement retailers such as Lowe’s Cos. Today’s report showed more Americans expected a pickup in employment opportunities and income gains in the next six months.

“The household sector is still improving and a lot of that improvement comes from home prices,” said Sam Coffin, an economist at UBS Securities LLC in Stamford, Connecticut. UBS Securities is the top forecaster of the Conference Board’s index in the last two years, according to data compiled by Bloomberg.

Estimates for consumer confidence ranged from 74.3 to 82 in the Bloomberg survey of 71 economists after an initial July reading of 80.3. The measure averaged 53.7 during the recession that ended in June 2009. The cutoff date for the Conference Board’s survey was Aug. 15.



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Consumer Sentiment to Drive Labor Day Travel

August 20, 2013 by · Leave a Comment 

The number of Americans traveling for the Labor Day holiday weekend will climb to the most in five years as consumer confidence boosts spending, AAA forecast.

The Associated Press reported that people taking trips of 50 miles or more from home will increase to 34.1 million from 32.7 million last year, AAA, the biggest U.S. motoring organization, said in its annual outlook. That’s the highest level since a record 45.1 million travelers five years ago. The long weekend runs from Aug. 29 to Sept. 2.

“Consumers are the most upbeat they have been since early 2008,” according to AAA, which cited economic optimism fueled in part by a strengthening housing market.

The Thomson Reuters/University of Michigan index of consumer sentiment in the U.S. hit a six-year high in July. New-home construction climbed 5.9% to an 896,000 annualized rate that same month, and the S&P/Case-Shiller index of property values in 20 cities rose 12.2% in May from a year earlier, the biggest 12-month gain since March 2006.

The expected gain in Labor Day travel is driven by “the increasingly positive economic outlook and optimism in the housing market,” Robert L. Darbelnet, chief executive officer of Heathrow, Florida-based AAA said in a statement. “As home prices improve in many parts of the country, more families are feeling comfortable about traveling this Labor Day holiday.”

Travel by automobile will rise 4.3% to 29.2 million travelers from 28 million a year ago. The number of air travelers during the holiday will increase 2.8% to 2.61 million from 2.54 million a year ago, making up 8% of travel, according to AAA.

As of mid-August, retail gasoline prices were about 2.7% lower than the same time a year ago, AAA said. The price at the pump last Labor Day averaged $3.83 a gallon, a record high for the holiday. Retail gasoline, averaged nationwide, fell 0.1 cent yesterday to $3.537 a gallon, AAA said today on its website, the lowest level since July 10.



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Report: Consumer Confidence Shoots up in July

July 29, 2013 by · Leave a Comment 

Americans are more confident about the economy than at any time since July 2007, a survey found, suggesting consumers will spend more and accelerate growth in the months ahead.

According to an Associated Press report, the University of Michigan said that its final reading of consumer sentiment in July was 85.1. That’s up one point from June and nearly 13 points higher than a year ago.

Rising home prices and steady job gains are bolstering household wealth and income. The proportion of Americans who expect their inflation-adjusted incomes to rise in the coming year is greater than at any time since late 2007, the survey found. And the percentage of Americans who say their home values have risen is also at a six-year high.

Consumer confidence is closely watched because spending by Americans accounts for 70% of the economy’s growth.

The University of Michigan polls roughly 500 people throughout the month and issues two readings. Americans’ expectations for future growth dipped, while their assessment of current conditions improved.

Consumers have been resilient despite paying higher taxes this year. Their spending growth most likely slowed in the April-June quarter after rising at the fastest pace in two years in the first quarter.

But with hiring solid and confidence rising, most economists forecast that consumers will step up spending and help propel economic growth later this year.

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Report: Consumer Sentiment Cools Off in July

July 12, 2013 by · Leave a Comment 

Consumer confidence unexpectedly cooled in July as Americans became less optimistic about the outlook for the economy.

Bloomberg reported that the Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 83.9 in July from 84.1 the month prior, today’s report showed. The median forecast in a Bloomberg survey called for a gain to 84.7. The gauge reached an almost six-year high of 84.5 in May.

The recent increases in mortgage rates and prices at the gas pump may have restrained consumers’ views on the economy in the next six months. At the same time, the group’s gauge of current conditions jumped to a six-year high as stock prices approached a record after falling in the middle of June.

“It’s a slip in confidence from recent highs rather than the start of a new downward,” said Gennadiy Goldberg, a strategist at TD Securities Inc. in New York. “As we get later in the year and the economy improves, consumers will start to see better numbers and they’ll notice that.”

Forecasts of the 66 economists for sentiment in the Bloomberg survey ranged from 80 to 88. The index averaged 64.2 during the recession that ended in June 2009, and 89 in the five years prior.

The Michigan survey compares with the weekly Bloomberg Consumer Comfort Index (COMFCOMF), which climbed to minus 27.3 in the week ended July 7, the highest level in more than five years, from minus 27.5. The figures showed Americans were more upbeat about their finances than at any time since April 2008, while a gauge of the buying climate increased to a nine-week high.

Other figures today showed prices paid to producers rose 0.8% in June, more than projected and the most since September.

The Michigan survey’s measure of current conditions, which takes stock of Americans’ views of their personal finance, increased to 99.7 in July from 93.8 at the end of last month.

The gauge of expectations six months from now fell to 73.8 from 77.8.

Mortgage rates this week climbed to the highest level in two years. The average 30-year fixed rate was 4.51% in the week ended yesterday, according to data from Freddie Mac. In November, it fell to a record low of 3.51%.

Gasoline prices have also increased this week. The average cost of a gallon of regular gas in the U.S. was $3.55 yesterday, up from $3.47 at the end of last week, according to figures from AAA, the nation’s largest motoring organization.


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