Written by Steven Hansen
The latest Conference Board Consumer Confidence Index’s headline number was little changed. The Index now stands at 129.1 (1985=100), up from 128.9 in June. A quote from the Conference Board: “Consumers’ appraisal of present-day conditions held steady, suggesting economic growth in Q3 is off to a strong start“.
Analyst Opinion of Conference Board Consumer Confidence
Consumer confidence had been steady for the previous two years – but the coronavirus killed that upswing. Consumer confidence during the pandemic was as low as seen in 2014 – but now has improved to pre-pandemic levels.
From the Conference Board:
Consumers’ appraisal of current business conditions improved slightly in July.
- 26.4% of consumers said business conditions are “good,” up from 25.2%.
- 19.3% of consumers said business conditions are “bad,” up from 19.1%.
Consumers’ assessment of the labor market was relatively flat.
- 54.9% of consumers said jobs are “plentiful,” up from 54.7%.
- 10.5% of consumers said jobs are “hard to get,” unchanged from June.
The consensus range from Econoday was 117.2 to 120.0 (consensus 118.8). This month’s index is based on data collected through 21 July 2021
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Per Lynn Franco, Director of Economic Indicators at The Conference Board:
Consumer confidence was flat in July but remains at its highest level since February 2020 (132.6). Consumers’ appraisal of present-day conditions held steady, suggesting economic growth in Q3 is off to a strong start. Consumers’ optimism about the short-term outlook didn’t waver, and they continued to expect that business conditions, jobs, and personal financial prospects will improve. Short-term inflation expectations eased slightly but remained elevated. Spending intentions picked up in July, with a larger percentage of consumers saying they planned to purchase homes, automobiles, and major appliances in the coming months. Thus, consumer spending should continue to support robust economic growth in the second half of 2021.
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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