Final August consumer sentiment index remained subdued due to higher prices and interest rates

Although there was a small uptick in late August, consumer sentiment remained at its lowest level since January. Most of the August decline was in the Current Economic Conditions Index, which fell to its lowest level since November 2016. These results stand in sharp contrast to the recent very favorable report on growth in the national economy.

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January consumer sentiment nearly flat from December, remains at high levels

Consumer sentiment has remained largely unchanged for more than a year at very favorable levels. The January Sentiment figure was just 0.2 Index-points below December's, and just 1.1 points below the 2017 average of 96.8--which was the highest yearly average since 2000. Stock price increases and the passage of tax reforms were mentioned by all-time record numbers of consumers.

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Consumer confidence dips slowly in December but still at elevated levels

Consumer confidence continued to slowly sink in December, with most of the decline among lower income households. The extent of the decline was minor, with the December figure just below the average for 2017 (95.9 versus 96.8). Indeed, the average in 2017 was the highest since 2000, and only during the long expansions of the 1960's and 1990's was confidence significantly higher. Tax reform was spontaneously mentioned by 29% of all respondents, with nearly an equal split between positive and negative impacts on economic prospects.

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November consumer sentiment dips from October's decade peak but still at high levels

Consumer sentiment narrowed its loss from mid-month, although it was still slightly below last month's decade peak. Overall, the Sentiment Index has remained largely unchanged since the start of the year at the highest levels since 2004. Overall, the data signal an expected gain of 2.7% in real consumption expenditures in 2018, and more importantly for retailers, the best runup to the holiday shopping season in a decade.

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Consumer sentiment slips slightly in late October but still at high levels

Consumer sentiment slipped ever so slightly in late October, despite remaining at its highest monthly level since the start of 2004. This is only the second time the Sentiment Index has been above 100.0 since the end of the record 1990's expansion, and its average during the first ten months of 2017 (96.7) has been the highest since 2000 (108.5).

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October consumer sentiment surges to highest level since early 2004

Consumer sentiment surged in early October, reaching its highest level since the start of 2004. The October gain was broadly shared, occurring among all age and income subgroups and across all partisan viewpoints. The data indicate a robust outlook for consumer spending that extends the current expansion to at least mid 2018, which would mark the 2nd longest expansion since the mid 1800s.

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September consumer sentiment dipped 1.8 points from August but up 4.3 points year-on-year

Consumer sentiment remained largely unchanged from the slightly lower level recorded at mid-month. The resilience of consumers has again been demonstrated as concerns about the impact of the hurricanes on the national economy have quickly faded. Given that the survey was able to reach most households in Florida and Texas in late September, it should be no surprise that small declines were recorded in the current financial situation of households.

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Consumer sentiment dips sharply in preliminary June survey

The modest early June drop of 2.6 points in the Sentiment Index masks a much larger decline since June 8th. Prior to that date the Sentiment Index had averaged 97.7, but since June 8th, the Index fell to 86.7, a decline of 11.0 points. While this break corresponds with James Comey's testimony, only a few consumers spontaneously referred to him or his testimony when asked to explain their views.

The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans.

Fortunately, a strong job market, improved household income and wealth have provided a financial buffer against rising uncertainties. Nonetheless, consumers have become less optimistic about the future course of the domestic economy.

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May consumer sentiment continued high plateau but partisan divide remains

According to the University of Michigan's monthly survey, consumer sentiment has continued to move along the high plateau established following Trump’s election. The May 2017 figure was virtually unchanged from the April reading, and nearly identical with the December to May average of 97.3.

Moreover, the partisan divide between Democrats and Republicans has also remained largely unchanged, with the first expecting a recession and the other more robust economic growth.
Despite the expected bounce back in spending in the current quarter, personal consumption is expected to advance by 2.3% in 2017, although this is based on averages across the political divide, which has never been as extreme as it is currently.

Consumer sentiment rises to 97.7 in May while partisan divide narrows

Consumer sentiment remained on the high plateau established following Trump's election, with the early May figure nearly identical with the December to May average of 97.4.

The recent stability in consumer sentiment, however, masks two important underlying shifts in the components as well as in the partisan divide. More favorable income gains and low inflation meant that consumers held the most favorable real income expectations in a dozen years. Buying plans, however, were mixed: household durables rose to a decade peak, while vehicle buying conditions slipped to a three year low.

Home buying conditions were viewed less favorably, but were offset by the most favorable views about home selling in more than a decade.

The partisan difference in the Expectations Index is still huge, but the gap between Democrats and Republicans narrowed slightly to 55 Index points from 65 three months ago, mainly due to Democrats expressing diminished fears of an immediate recession and lessened concerns about personal financial setbacks.

Consumer confidence inches up to 90.4 in August

Confidence inched upward in early August due to more favorable prospects for the overall economy offsetting a small pullback in personal finances. Home buying has become particularly dependent on low interest rates, with net references to low interest rates spontaneously mentioned by 48%.

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Consumer sentiment dips in June, but no recession is anticipated

Consumers were a bit less optimistic in June due to rising concerns about prospects for the economy. While no recession is anticipated, consumers increasingly expect a slower pace of growth in the year ahead.

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Consumer sentiment dips in June, but no recession is anticipated

Consumers were a bit less optimistic in June due to rising concerns about prospects for the economy. While no recession is anticipated, consumers increasingly expect a slower pace of growth in the year ahead. Importantly, the persistent strength in personal finances will keep consumer spending at relatively high levels and support an uninterrupted economic expansion. Although the data are consistent with GDP growth falling slightly below 2.0% in 2016, real consumer spending can be expected to rise by 2.5% in 2016 and 2.7% in 2017.

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Consumers less optimistic in preliminary June survey

Consumers were a bit less optimistic in early June due to increased concerns about future economic prospects. The strength recorded in early June was in personal finances, and the weaknesses were in expectations for continued growth in the national economy.

On the negative side of the ledger, consumers do not think the economy is as strong as it was last year nor do they anticipate the economy will enjoy the same financial health in the year ahead as they anticipated a year ago.

Overall, the data still indicate that real consumer expenditures can be expected to rise by 2.5% in 2016 and 2.7% in 2017.

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Consumer sentiment rebounded in May to highest level in nine months

Consumer sentiment rebounded in May to its highest level in the last nine months. There have been only four times out of the last 110 monthly surveys that the Sentiment Index was higher.  Overall, the data indicate that real consumption will grow by 2.5% in 2016 and by 2.7% in 2017.

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Consumer sentiment rebounded in early May, with expectations index soaring the most

Consumer sentiment rebounded in early May due to more frequent income gains, an improved jobs outlook, and the expectation of lower inflation and interest rates.

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Consumer sentiment declines again in April

Consumer sentiment continued its slow decline in April due to weakening expectations for future economic growth, although consumers' views of their current finances remained positive.

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BuilderBytes' MetroIntelligence Economic Update for 8/18/15

Please click here to see the edition of BuilderBytes for 8/18/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Builder confidence rises to 61 in August for the highest reading since November 2005
• Empire State Manufacturing Survey tumbles sharply in August but future outlook remains positive
• Producer Price Index rose 0.2 percent in July but down 0.8 percent for previous 12-month period
• Consumer sentiment dips in preliminary August reading

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 4/21/15

Please click here to see the edition of BuilderBytes for 4/21/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Leading Economic Index rose 0.2 percent in March, but rate of growth slowing
• CPI rose 0.2 percent in March but down 0.1 percent over previous 12 months
• Consumer sentiment rises more than expected in April

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.

BuilderBytes' MetroIntelligence Economic Update for 3/17/15

Please click here to see the edition of BuilderBytes for 3/17/15 on the Web.

In this issue of the MetroIntelligence Economic Update, I covered the following indicators:

• Builder confidence falls two points in March
• Producer Price Index dips 0.5 percent in February, down 0.6 percent for previous 12 months
• Consumer sentiment dips in March
• Empire State Manufacturing Survey shows modest expansion but six-month outlook dips

Want to advertise in the newsletter and reach over 130,000 readers? Contact National Sales Manager Nick Cosan at nkosan@penpubinc.com.