Consumer sentiment improved in late June, ending the month close to a near six-year high set in May, as optimism among higher-income families rose to its strongest level in six years, a survey released on Friday (June 28) showed.
Reuter’s reported that the Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment was 84.1 points, just slightly below a near six-year high of 84.5 in May. The late-June figure was higher than the preliminary reading of 82.7. Economists polled by Reuters had forecast the final June reading of 82.8.
“Consumers believe the (economic) recovery has achieved an upward momentum that will not be easily reversed,” survey director Richard Curtin said in a statement.
He added the recent drop in stock prices and the jump in mortgage rates have not caused a deterioration in consumers’ view on the economy.
“To be sure, few high or low income consumers expect the economy to post robust gains or think the unemployment rate will drastically shrink during the year ahead,” Curtin said.
Consumer sentiment is considered by some economists as a predictor on consumer spending, which accounts for 70% of the U.S. economy.
The latest Thomson Reuters/University of Michigan data was consistent with the June consumer confidence readings from the Conference Board released earlier this week. The research group’s U.S. consumer confidence index rose to 81.4 this month, the highest since January 2008.
Household expenditures, however, have remained sluggish despite improving optimism. Consumer spending grew at an annualized 2.6% in first quarter, faster than the 1.8% pace in the last three months of 2012 but slower than an earlier government estimate of 3.4%.
The barometer of current economic conditions ended at 93.8 in June, down from 98.0 in May. This was above an early June reading of 92.1 and economists’ forecast of 92.8.
The survey’s gauge of consumer expectations ended June at its highest level since October at 77.8, up from 75.8 in May. The latest reading was stronger than the preliminary June figure of 76.7. Economists had projected a late-June figure of 77.0.
Consumer confidence in June has eased from a six-year high as progress in the labor market supported Americans’ views of the economic outlook.
Bloomberg News reported that the Thomson Reuters/University of Michigan preliminary index of consumer sentiment declined to 82.7 in June from 84.5 the prior month that was the highest since July 2007, a report today showed. The median forecast in a Bloomberg survey was unchanged at 84.5.
Steady hiring gains coupled with rising equity prices and property values are underpinning Americans’ confidence. Further improvement from the 175,000 jobs added last month may be needed to help accelerate the consumer purchases that make up about 70% of the economy.
“The labor market does seem to be gaining some traction so far in 2013,” Kevin Cummins, an economist at UBS Securities LLC in Stamford, Conn., said before the report. “House prices continue to recover and equity values continue to rise, at least on balance, ahead of the last couple days. That is adding important support to consumption.”
Forecasts in the Bloomberg survey ranged from 82 to 89. The index averaged 64.2 during the recession that ended in June 2009 and 89 in the five years prior.
The Michigan survey follows the weekly Bloomberg Consumer Comfort Index, which slipped to minus 31.3 for the period ended June 9, a two-month low, from minus 29.7. It reached a five-year high of minus 28.9 in late April.
The number of recreational vehicles delivered to dealers’ lots is expected to reach a six-year high in 2013 as fledgling RV buyers such as Karen and Jim Smith, of San Jose, Calif., shake off the economic slumber of the past few years and prepare to hit the road this summer.
“There are just so many things to see that we’ve never seen before: Mount Rushmore, the Grand Canyon, Lookout Mountain in Tennessee,” Karen Smith said after writing a $21,000 check for her 18-foot 2014 White Water Retro Travel Trailer that came stocked with a queen-size bed, separate refrigerator and freezer, two-burner stove, microwave, full-size bath, shower and beds for three more people.
As reported by the San Jose Mercury News, the Smiths represent new hope for a U.S. RV industry that sustained a series of body blows beginning with the 2008 recession but now appears to be rebounding in the Bay Area and beyond.
The industry has not seen more than 300,000 RVs shipped to dealers around the country since 2007, the year before the recession took hold. But deliveries this year were up 11% in the first quarter and the RV industry now expects to see a total of 307,300 deliveries of motor homes and tow-able RVs. Towables make up the overwhelming majority of RV sales in the U.S.
The number of both registered motor homes and towable RVs had been steadily falling in California from a 2005 peak of 11,494 motorhomes and 34,032 towable RVs and may have bottomed out in 2009 with 2,633 registered motorhomes and 8,820 towables.
Last year, the number jumped to 3,785 registered motorhomes and 11,565 towable RVs, according to Statistical Surveys Inc., which tracks RV registrations across the country.
“Our industry is an economic indicator,” said Kevin Broom, spokesman for the Virginia-based Recreation Vehicle Industry Association (RVIA). “When shipments go down, they usually go down ahead of a recession. When shipments come back, they usually come back ahead of the recovery. Consumers in general are a little more confident they’ll have their job this year, next year and even five years from now. So they’re ready to make a purchase.”
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Consumer confidence climbed to the highest level in more than five years and home prices advanced by the most in seven as the housing rebound gives the U.S. economy a lift.
Bloomberg reported that the Conference Board’s sentiment index rose to 76.2 in May, exceeding all estimates in a Bloomberg survey of economists and the highest since February 2008, data from the New York-based private research group showed today. The S&P/Case-Shiller index of property values in 20 cities increased 10.9 percent in the year to March, the biggest 12-month gain since April 2006.
Rising property and stock values are boosting household finances, helping Americans cope with an increase in the payroll tax and wage gains that have barely kept up with inflation.
“We’re getting back on track,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, the top-ranked forecaster of Case-Shiller data over the past two years, according to data compiled by Bloomberg. “Housing continues to look very solid in a broad-based manner. We’re continuing to expand.”
The median estimate in a Bloomberg survey projected the consumer confidence index would rise to 71.2. Forecasts (CONCCONF) of the 75 economists polled ranged from 65 to 76. The April reading was revised up to 69 from a previously reported 68.1 in April. The measure averaged 53.7 in the recession that ended in June 2009.
The Conference Board’s gauge of consumer present conditions advanced to 66.7 in May, the highest since May 2008. The measure of expectations for the next six months jumped to 82.4, the highest since October.
Confidence among American consumers unexpectedly slumped in March, which may signal a cooling in spending, the biggest part of the economy.
According to a report by Bloomberg, the Thomson Reuters/University of Michigan preliminary sentiment index for March fell to 71.8, the lowest level since December 2011, from 77.6 in February. The gauge was projected to increase to 78, according to the median estimate of 67 economists surveyed by Bloomberg.
Concern may be starting to mount over the damage that automatic across-the-board federal spending cuts will cause the economy and hiring. That may keep tempering optimism created by record stock prices, a hiring pickup, and a housing rebound that have so far helped propel bigger-than-forecast gains in spending.
“There was a little bit of a sequester-news related dip in confidence,” said Jim O’Sullivan, chief U.S. Economist at High Frequency Economics in Valhalla, New York. “Certainly on the minus side you have fiscal tightening, but on the plus side you’ve got the improving labor market.”
Forecasts ranged from 70 to 82.5, according to the Bloomberg survey. The index averaged 64.2 during the recession ended in June 2009, and 89 in the five years prior to the 18- month slump.
Consumers in today’s confidence report said they expect an inflation rate of 3.3% over the next 12 months, the same as in the prior two months. Over the next five years, Americans expected a 2.9% rate of inflation, down from February’s 3%.
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Consumer confidence in the U.S. rose in February to a three-month high, which may help to preserve recent gains in household spending.
Bloomberg reported that the Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 76.3 this month from 73.8 in January. The gauge was projected to rise to 74.8, according to the median forecast in a Bloomberg survey.
ncreased property values, a strengthening job market and stocks at five-year highs are providing a boost to Americans’ balance sheets. A pickup in wealth would help make up for recent gains in gasoline prices and the hit to take-home pay from a two percentage-point increase in the payroll tax.
“We saw a meaningful improvement in overall financial market conditions and home prices, and those are the kind of drivers now for consumer confidence,” said Millan Mulraine, director of U.S. rates research at TD Securities USA LLC in New York, who projected a sentiment index of 76. “As attitudes continue to improve, we are likely to see that possibly be reflected in improved spending.”
Other data today showed manufacturing is on the mend. The Federal Reserve Bank of New York said its general economic index climbed to 10 in February, the highest since May, from minus 7.8 in the prior month. Readings greater than zero signal expansion in New York, northern New Jersey and southern Connecticut.
Consumer confidence in the U.S. unexpectedly fell in January to a one-year low as higher payroll taxes began to take hold.
Bloomberg reported that the Thomson Reuters/University of Michigan preliminary index of consumer sentiment dropped to 71.3, the lowest since December 2011, from 72.9 the prior month. The gauge was projected to rise to 75, according to the median forecast of 74 economists surveyed by Bloomberg News.
Debate in Washington over spending and the debt ceiling, and an increase in payroll taxes used to fund Social Security are hurdles for a pickup spending, as discounters such as Target Corp. try to attract shoppers with year-round price matching. At the same time, job gains, rising home values and cheaper fuel may help sustain retail sales.
“Households are getting a little bit jaded with the ongoing political stalemate,” said Paul Dales, a senior economist at Capital Economics Ltd. in London, who projected a reading of 70. People are also seeing that their “after-tax income has fallen a little bit. On the face of it, any fall in confidence might suggest that spending might be slower.”
Estimates for the confidence measure ranged from 70 to 84, according to the Bloomberg survey. The index averaged 64.2 during the last recession and 89 in the five years before the economic slump that began in December 2007 and ended in June 2009.
The figures are in line with Bloomberg’s Consumer Comfort Index, which dropped last week to a three-month low, reflecting a fourth straight decline in the buying-climate gauge.
The Michigan index of expectations six months from now, which more closely projects the direction of consumer spending, dropped to 62.7, the lowest since November 2011, from 63.8 the prior month.
U.S. consumers peering over the “fiscal cliff” don’t like what they see.
The Associated Press reported that fears of sharp tax increases and government spending cuts set to take effect next week sent consumer confidence tumbling in December to its lowest level since August.
The Conference Board said Thursday (Dec. 27) that its consumer confidence index fell for the second straight month in December to 65.1, down from 71.5 in November.
The survey showed consumers’ outlook for the next six months deteriorated to its lowest level since 2011 — a signal to Lynn Franco, the board’s director of economic indicators, that consumers are worried about the tax hikes and spending cuts that take effect Jan. 1 if the White House and Congress can’t reach a budget deal.
Earlier this week a report showed consumers held back shopping this holiday season, another indication of their concerns about possible tax increases.
The December drop in confidence “is obvious confirmation that a sudden and serious deterioration in hopes for the future took place in December — presumably reflecting concern about imminent ‘fiscal cliff’ tax increases,” said Pierre Ellis, an economist with Decision Economics.
The decline in confidence comes at a critical time when the economy is showing signs of improvement elsewhere.
A recovery in the housing market is looking more sustainable. On Thursday, the government said new-home sales increased in November at the fastest seasonally adjusted annual pace in 21/2 years.
And the job market has made slow but steady gains in recent months. The average number of Americans applying for unemployment benefits over the past month fell to the lowest level since March 2008.
But the political wrangling in Washington threatens the economy’s slow, steady progress.
President Barack Obama and House members returned to Washington Thursday to resume talks with just days to go before the deadline.
But Senate Majority Leader Harry Reid warned that the government appears to be headed over the “fiscal cliff” because talks had gone nowhere. The Nevada Democrat made the comments minutes after the consumer confidence report was released.
The combination of weaker consumer confidence and dimming hopes of a deal on the “fiscal cliff” hit financial markets hard Thursday.
A short fall over the cliff won’t push the economy into recession. But most economists expect some tax increases to take effect next year. That could slow economic growth.
While consumers are more worried about where the economy is headed, they were upbeat about present conditions, according to the latest survey. Their assessment of current economic conditions rose this month to the highest level since August 2008.
A key reason for that is gas prices hit a 2012 low of $3.21 per gallon last week. Normally, that would prompt consumers to spend more on holiday shopping.
But the opposite has happened. A report from MasterCard Advisors Spending pulse indicated sales grew in the two months before Christmas at the weakest rate since 2008, when the country was in a deep recession.
There were other distractions this holiday season. In late October, Superstorm Sandy battered the Northeast and mid-Atlantic states, which account for 24 percent of U.S. retail sales. That, coupled with the presidential election, hurt sales during the first half of November.
Shopping picked up in the second half of November. But “fiscal cliff” worries dampened sales in December.
An increasingly upbeat view of the economy and jobs market drove U.S. consumer sentiment to a more than five-year high in early November, while a jump in wholesale inventories suggested the economy grew more than initially estimated last quarter.
It was the fourth month that A What To Do To Get Over Ex Wife mericans adopted a rosier economic outlook, even as financial markets show increasing anxiety about the approach of the “fiscal cliff” of spending cuts and tax increases set to take effect in the new year, on fears they could push the country back into recession.
Separate data from the government also released on Friday showed wholesale inventories rose in September by the most in nine months, prompting economists to raise their forecasts for third-quarter growth. Inventories are a key element of the government’s measure of economic growth and can highlight underlying strength or weakness.
The index of consumer sentiment from Thomson Reuters/University of Michigan rose to 84.9 in November from 82.6, topping economists’ expectations for a reading of 83.
It was the highest level since July 2007. The measure of consumer expectations also hit a more than five-year high, rising to 80.8 from 79.0. Most interviews for the survey were done before Tuesday’s presidential election.
“It shows that the U.S. economy is on a decent footing heading into the so-called fiscal cliff,” said Joe Manimbo, market analyst at Western Union Business Solutions in Washington.
“There’s a lot at stake, and there’s a lot of momentum that could be lost if lawmakers don’t get their act together.”
Survey director Richard Curtin said the re-election of President Barack Obama should not have an impact on overall expectations going forward, but if Washington does not act quickly to avoid the fiscal cliff, with its $600 billion in automatic spending cuts and tax rises, consumers could face a shock.
Friday’s data came a week after the government’s monthly labor market report showed job growth picked up in October. The unemployment rate ticked up to 7.9%, though it held below 8 percent for the second month in a row.
But the chances of a comprehensive legislative solution to the fiscal cliff before January 1 are considered slight, and members of Congress have been looking for a temporary fix to buy time
Consumer confidence jumped to its highest level in seven months in September as Americans were more optimistic about the job market and income prospects, a private sector report showed on Tuesday (Sept. 25).
Reuters reported that the Conference Board, an industry group, said its index of consumer attitudes rose to 70.3 from an upwardly revised 61.3 in August. It was the highest level since February and topped economists’ expectations for 63, according to a Reuters poll.
August was originally reported as 60.6.
“Despite continuing economic uncertainty, consumers are slightly more optimistic than they have been in several months,” said Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement.
The expectations index climbed to 83.7 from 71.1, while the present situation index gained to 50.2 from 46.5.
Consumers’ labor market assessment improved. The “jobs hard to get” index slipped to 39.9% from 40.6% the month before, while the “jobs plentiful” index rose to 8.3% from 7.2%.
Looking six months ahead, 16.3% expected income increases, up from 16%, while 14.1% anticipated decreases, down from 16.7%.
Consumers also felt better about price increases with expectations for inflation in the coming 12 months down to 5.8% from 6%.