Tag: consumer confidence

Monday Economic Report – December 15, 2014

Here is the summary for this week’s Monday Economic Report: 

The biggest domestic economic news story last week was actually a global one: The price of petroleum continued to plummet. Since peaking at $107.95 per barrel on June 20, the price of West Texas Intermediate crude has fallen dramatically, down to $57.49 a barrel on Friday. There are a number of factors at play here, including increased North American energy production, excess supply worldwide, a stronger U.S. dollar and a slowing global economy. It is this latter point that has spooked financial markets, on fear that the weakened global demand for petroleum might be a harbinger of larger challenges. Indeed, as discussed in the most recent Global Manufacturing Economic Update, North America’s economy appears to be a bright spot in an otherwise sluggish international economic climate. (continue reading…)

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University of Michigan: Consumer Confidence Soared to its Highest Level Since January 2007

Preliminary consumer confidence numbers soared to their highest level since January 2007, according to the University of Michigan and Thomson Reuters. The Consumer Sentiment Index rose from 88.8 in November to 93.8 in December. Measures for the current (up from 102.7 to 105.7) and forward-looking (up from 79.9 to 86.1) economic outlook were both higher for the month. This data suggests that Americans were more upbeat in their assessments of the economy, perhaps boosted by improvements in the labor market and by cheaper gasoline prices. (continue reading…)

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Monday Economic Report – December 1, 2014

Here is the summary for this week’s Monday Economic Report: 

The U.S. economy grew 3.9 percent at the annual rate in the third quarter, according to revised real GDP data released last week. This was better than the 3.5 percent original estimate, and more importantly, it suggests real GDP increased at an annualized 4.2 percent over the past two quarters. The report highlighted a number of positive elements in the economy, including healthy increases in consumer and business spending, goods exports and end-of-fiscal-year government spending. The revision also included better inventory replenishment numbers than originally estimated. (continue reading…)

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Conference Board: Consumer Confidence Unexpectedly Fell in November

The Conference Board said that consumer sentiment unexpectedly fell in November. The Consumer Confidence Index was anticipated to build on October’s revised 94.1 reading, which was the highest since October 2007. Instead, the index declined to 88.7 in November, its lowest level since June. This figure has seesawed over the past four months, with the index up in August, down in September and then up and down again in October and November. (continue reading…)

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University of Michigan: Consumer Confidence at Highest Point Since July 2007

The University of Michigan and Thomson Reuters said that consumer confidence rose to its highest level since July 2007. Preliminary Consumer Sentiment Index data increased from 86.9 in October to 89.4 in November. This reflects continued improvement in Americans’ perceptions about the U.S. economy, with the headline figure rising from 75.1 in November 2013 (in the aftermath of the budget shutdown). Moreover, it mirrors similar data from the Conference Board, which also has reached a pre-recessionary high of late. (continue reading…)

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Monday Economic Report – November 3, 2014

Here is the summary for this week’s Monday Economic Report:

The U.S. economy grew 3.5 percent at the annual rate in the third quarter, representing decent growth following the disappointing first half of 2014. Consumer and business spending, which rebounded strongly in the second quarter, extended those gains in the third quarter, albeit with some easing in the pace of growth. Exports were also up strongly for the quarter, and imports were down. Dramatic inventory swings over the past three quarters were also evident, with stockpiles searching for a new normal. After adding 1.47 percentage points to real GDP in the second quarter, slower inventory replenishment subtracted 0.57 percent in the third quarter, making it one of the few negatives in the report. (continue reading…)

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Conference Board: After Ebbing in September, Consumer Confidence Rebounded in October

The Conference Board said that consumer sentiment rebounded in October after ebbing in September. The Consumer Confidence Index rose from 89.0 in September to 94.5 in October. This was higher than the 93.4 reading observed in August, and both figures were the highest since October 2007, seven years ago and pre-dating the recession. Overall, Americans have become more confident over the course of the past year. In October 2013, the index stood at 72.0, and the public was worried about economic growth in light of the budget deadlock and the government shutdown. (continue reading…)

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University of Michigan: Consumer Confidence Rose to a Pre-Recessionary High in October

The University of Michigan and Thomson Reuters said that preliminary data on consumer confidence reflects a pre-recessionary high in October. The Consumer Sentiment Index increased from 84.6 in September to 86.4 in October, its highest level since July 2007. This mirrors similar data from the Conference Board, which has also reached pre-recessionary levels of late (although that measure unexpectedly declined in September, reflecting a public that remains on edge).

Even with the increase in October, the University of Michigan report also shows these anxieties. The index for the current economic environment was unchanged at 98.9, and it remains below its recent peak of 99.8 in August. Geopolitical events, slowing global growth, stock market volatility and worries about Ebola might help to explain this hesitance. Moreover, Americans remain concerned about labor market and income growth, despite better data of late on the hiring front.

At the same time, the future-oriented index rose from 75.4 to 78.4, its highest level in two years. Lower gasoline prices likely lifted people’s spirits, helping to increase disposable income, at least for now. Overall, this survey suggests that consumers’ views about the economy are quite nuanced, and at least for this month, optimism about the future outweighed the concerns.

We will get final data on October consumer sentiment from the University of Michigan on October 31. The Conference Board will also release its survey data on consumer confidence on October 28.

Chad Moutray is the chief economist, National Association of Manufacturers. 

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Monday Economic Report – October 6, 2014

Here are the files for this week’s Monday Economic Report: 

Several recent indicators have shown marked improvements in the U.S. economy and for manufacturing activity, particularly when compared to earlier in the year. These range from the NAM/IndustryWeek Survey of Manufacturers to increased levels of demand and output. Last week, for instance, the Institute for Supply Management (ISM) reported that the pace of production (up from 64.5 to 64.6) was marginally higher in September, with the index exceeding 60—indicating strong growth—for four consecutive months. Likewise, the new orders index has measured 60 or higher for three straight months, even though it eased somewhat in September (down from 66.7 to 60.0). That was an encouraging sign, and it was consistent with a relatively upbeat outlook as noted by the National Association for Business Economics (NABE).

Yet, the headline ISM Purchasing Managers’ Index (PMI) for manufacturing unexpectedly dropped from 59.0 to 56.6. The prior month’s reading had been a three-year high, making the deceleration in sentiment a bit of a disappointment. The drop stemmed from slower paces of growth for domestic sales, exports (down from 55.0 to 53.5) and employment (down from 58.1 to 54.6). Along those lines, manufacturers added just 4,000 net new workers in September, with August’s employment number revised lower to reflect a decline of 4,000 employees for the sector. As such, we have had two straight months of disappointing manufacturing jobs numbers, which stand in stark contrast to the stronger hiring rates seen prior to August. We can hope for healthier job gains in the coming months, which would be more consistent with the mostly optimistic tone seen in other measures.

Indeed, the Dallas Federal Reserve Bank’s manufacturing survey noted robust pickups in production, capacity utilization and shipments in September, and respondents continue to expect stronger activity levels over the next six months. In addition, factory shipments have risen 2.1 percent year-to-date through August, or 3.1 percent over the past 12 months. The corresponding data on new factory orders reflected a sharp decline in August, but that was the result of very strong nondefense aircraft sales in July. While new manufactured goods sales remained soft when excluding transportation orders, the underlying data also reflect gains made since the winter months. Moreover, manufacturers have been confident enough in their outlook to increase construction spending, which rose 1.5 percent in August, increasing for the fifth straight month. Year-over-year growth in manufacturing construction spending was an impressive 14.9 percent.

At the consumer level, personal spending rebounded in August after holding steading in July. Since winter-related declines in January, personal spending has risen 2.7 percent, with 4.1 percent growth year-over-year. Strength in durable goods purchases boosted the August consumption figure. Still, Americans remain anxious, particularly about labor and income growth. The Conference Board’s Consumer Confidence Index declined from 93.4 in August to 86.0 in September, a notable and sizable decrease especially after the index had been at its highest point since October 2007 in August. It is possible that geopolitical events have put the public on edge, dampening enthusiasm. (The same could probably be said of the ISM report discussed above.) We have similar concerns in comparable data from the University of Michigan and Thomson Reuters, and the two releases support the notion that the consumer remains cautious despite recent improvements in sentiment.

Meanwhile, the U.S. trade deficit narrowed from $40.32 billion in July to $40.11 billion in August, its lowest level since January. In general, we have seen the trade deficit decline after peaking at $45.98 billion in April. Since then, goods exports have increased by $3.79 billion, and goods imports have declined by $1.99 billion, helping to explain the bulk of the shift over that four-month period. Much of that improvement can be explained by increased energy exports and reduced energy imports.

After a busy economic data release calendar last week, this week will be much lighter. The minutes of the September 16–17 Federal Open Market Committee meeting will be released on Wednesday, with market watchers looking for clues for when the Federal Reserve will start raising short-term rates. Other highlights include the latest data on consumer credit, job openings and wholesale trade.

Chad Moutray is the chief economist, National Association of Manufacturers. 

manufacturing construction - oct2014

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Conference Board: Consumer Confidence Unexpectedly Fell in September

The Conference Board said that consumer sentiment unexpectedly fell in September to its lowest level since May. The Consumer Confidence Index declined from a revised 93.4 in August to 86.0 in September. This pullback was even more disappointing given the fact that August’s reading had been the highest since October 2007, nearly seven years ago and pre-dating the recession. Therefore, while confidence remains higher today than earlier in the year, it is clear that Americans still remain anxious about the economy and about labor and income growth. It is also possible that geopolitical events have put the public on edge, dampening optimism. We have similar concerns in comparable data from the University of Michigan and Thomson Reuters.

Indeed, perceptions about current (down from 93.9 to 89.4) and future (down from 93.1 to 83.7) conditions were both lower for the month, particularly the latter. The percentage of respondents saying that jobs were “plentiful” dropped from 17.6 percent to 15.1 percent, and the percentage expecting their incomes to decrease rose from 11.6 percent to 13.4 percent. These data tend to suggest that there are nagging worries about jobs and the economy. Yet, there were also some positives. The percentage of those taking the survey who felt that their incomes would increase rose from 15.5 percent to 16.8 percent, and overall, many of these measures had made improvements over recent months despite the declines in September.

Buying intentions were also mixed, largely mirroring the reduced confidence described above. The percentages planning to buy a new automobile (down from 13.5 to 12.0 percent) and home (down from 5.3 percent to 4.9 percent) were both lower; yet, the percentage planning to purchase new appliances increased from 45.7 percent to 51.3 percent.

Chad Moutray is the chief economist, National Association of Manufacturers. 

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