Consumer Confidence

September 30th, 2014 10:18 am | by John Jansen |

Via Gennadiy Goldberg at TDSecurities:

Consumer confidence declined substantially in September according to the Conference Board survey, falling to 86.0 from an upwardly revised 93.4 last month – its lowest level since May. The decline appears to have been broad-based, with the current conditions index declining to 89.4 from 93.9 and future expectations plunging to 83.7 from 93.1. The pullback in confidence from recent cycle highs represents considerable deterioration in consumers’ outlooks, hinting that the recent strong pace of growth could come under some pressure. We will nevertheless continue to watch for confirmation from other indicators, as the survey’s Michigan counterpart continued to show confidence hovering around cycle highs in September.

While purchase plans for homes slipped to 4.9% from 5.3% and auto purchase intentions fell to 12.0% from 13.5% in September, durable goods purchase intentions rebounded considerably, rising to 51.3% from 45.7%. Nevertheless, with consumer outlooks on the decline, the labor differential (the number of respondents saying that jobs are plentiful less those believing that jobs are hard to get) declined to -15.0% from a cycle high of -12.4% last month. While the number of respondents believing jobs are hard to get remained relatively flat, the number of respondents suggesting that jobs are plentiful fell to 15.1% from a cycle high of 17.6% last month.
In sum, while the weaker confidence data certainly runs counter to the more positive tone of US economic reports during recent months, the data does hint at the potential for some moderation in growth momentum later in the year. We will be watching for confirmation of this slowing trend from other indices, as overall growth momentum remains relatively positive.


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