Written by Steven Hansen
The latest Conference Board Consumer Confidence Index’s headline number was little changed in May. The Index now stands at 117.2 (1985=100), down marginally from 117.5 in April. A quote from the Conference Board: “… consumers’ short-term optimism retreated, prompted by expectations of decelerating growth and softening labor market conditions in the months ahead“.
Analyst Opinion of Conference Board Consumer Confidence
Consumer confidence had been steady for the previous two years – but the coronavirus killed the upswing. Consumer confidence during the pandemic was as low as seen in 2014 – but now has improved to nearly pre-pandemic levels.
From the Conference Board:
NOTE: The May 25, 2021 release of The Conference Board Consumer Confidence Index®is the first based on survey data collected online. Data has been restated back to January 2021, the effective changeover month; no other data revision was necessary.
The consensus range from Econoday was 118.0 to 124.2 (consensus 119.0). This month’s index is based on data collected through 19May2021
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Per Lynn Franco, Director of Economic Indicators at The Conference Board:
After rebounding sharply in recent months, U.S. consumer confidence was essentially unchanged in May. Consumers’ assessment of present-day conditions improved, suggesting economic growth remains robust in Q2. However, consumers’ short-term optimism retreated, prompted by expectations of decelerating growth and softening labor market conditions in the months ahead. Consumers were also less upbeat this month about their income prospects—a reflection, perhaps, of both rising inflation expectations and a waning of further government support until expanded Child Tax Credit payments begin reaching parents in July. Overall, consumers remain optimistic, and confidence should remain resilient in the short term, as vaccination rates climb, COVID-19 cases decline further, and the economy fully reopens
Caveats Relating to CB Consumer Confidence
From the Conference Board:
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.
Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90 percent of the world’s population. For more information, visit www.nielsen.com.
From Econoday:
The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income. Three thousand households across the country are surveyed each month. In general, while the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month.
Consumer confidence and retail sales generally move in tandem but not necessarily each and every month. Note that consumer assessments of employment conditions are heavily weighted in the consumer confidence index.
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