The Consumer Confidence Index from the Conference Board rose from 61.9 in March to 68.1 in April. This brings the index essentially back to where it was in February, when it stood at 68.0, but it is below the 73.1 reading observed in October. In short, sentiment appears to have improved of late, even as it is not quite where we would like for it to be. This is largely consistent with a similar survey from the University of Michigan and Thomson Reuters, which was released last week.

Noting this month’s improvement, Lynn Franco, the Director of Economic Indicators at the Conference Board, cautioned that “… consumers’ confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike and the sequester. Thus, while expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend.”

Specifically, the Conference Board noted that opinions about the current and future economy have advanced in April, with the largest gain seen in the forward-looking measure. The expectations component of the index rose from 63.7 to 73.3 for the month, above the level seen in February (72.4). With that said, Americans remain largely frustrated with the labor market, with a net increase in the percentage of those who feel that jobs are hard to get.

The importance of these types of surveys, of course, is how they translate into consumer spending patterns. Yesterday, we learned that retail sales growth eased in March, with higher payroll taxes and persistent anxieties slowing purchases. The Conference Board’s survey found that some of this uneasiness continued into its respondents’ buying plans. The percentage of those planning to purchase autos and appliances were down slightly; whereas, home buying intentions were unchanged.

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

The University of Michigan and Thomson Reuters report that consumer confidence moved higher from 73.8 in January to 76.8 in February. This was the second consecutive monthly gain, with the Consumer Sentiment Survey index plummeting post-election from 82.7 in November to 72.9 in December on fiscal cliff worries. Americans remained downbeat in January, with many of them reacting negatively to higher payroll taxes.

Perceptions about the current and future economic environment improved for the month. The index for present conditions rose from 85.0 to 88.0 for the month; whereas, the forward-looking index increased from 66.6 to 68.7. Even with February’s higher numbers, sentiment remains sub-par. Americans remain less positive than they were in November (which had been a 5-year high) and well below an ideal index value of closer to 100. The simple truth is that confidence has been more subdued because of slowly advancing economic growth, elevated unemployment rates, higher taxes, and other pocketbook issues.

Inflationary expectations in the University of Michigan survey remain modest. Consumers expect prices to rise 3.3 percent over the next 12 months, the same pace as was predicted last month but up from the 3.1 percent rate predicted in November.

The University of Michigan and Thomson Reuters report that consumer confidence dropped from 72.9 in December to 71.3 in January. This follows the steep fall in December – after the election and leading up to the tense fiscal cliff negotiations – from 82.7 in November.

Sentiment about both the current and future economy dipped, with the largest decline related to the present environment. The index for present conditions dropped from 87.0 to 84.8; whereas, the forward-looking measure fell from 63.8 to 62.7.

In addition to frustrations related to the political process, consumer reactions to reduced paychecks as a result of the expiration of the payroll tax holiday could partially explain this decrease. The worry would be that lower consumer sentiment could lead to reductions in spending, and to the extent that this is related to less disposable income, that might be expected. So far we have not seen these declines, as retail sales were reported to have increased 0.5 percent in December.

Inflationary expectations in the University of Michigan survey remain modest, but did pick up slightly in December. Consumers expected prices to rise 3.4 percent over the next 12 months, up from 3.3 percent from December and 3.1 percent in November.

Chad Moutray is chief economist, National Association of Manufacturers.

The University of Michigan and Thomson Reuters report that consumer confidence fell from 82.7 in November to 74.5 in December. After rising from July (72.3) through November, December’s reading marks a reversal on higher sentiment. This is largely due to worries about the fiscal cliff, as consumers are beginning to focus on its possibility more than in previous months.

While Americans’ perceptions about the current and future economic environment were both downgraded, it was the expectations component that declined by more. The forward-looking sub-index plunged from 77.6 to 64.6, or its lowest level since December 2011. The measure of current conditions decreased from 90.7 to 89.9, or more moderately.

This shift in sentiment is important, as consumer spending has been one of the main drivers of the economy this year. In fact, consumer spending added about one percentage point to the real GDP growth rate of 2.7  percent in the third quarter, with the bulk of that (0.82 percentage points) from the purchase of durable and nondurable goods. A worried consumer might pull back their spending, with major implications for the larger macroeconomy. Already, we have seen businesses decrease their investments and slow hiring – as noted in yesterday’s NAM/IndustryWeek survey and elsewhere. In fact, capital spending was a drag on real GDP in the third quarter, a trend that should continue into the current one.

Inflationary expectations in the University of Michigan survey remain modest, but did pick up slightly in December. Consumers expected prices to rise 3.3 percent over the next 12 months, up from 3.1 percent from November.

Chad Moutray is chief economist, National Association of Manufacturers.

The University of Michigan and Thomson Reuters said that consumer sentiment rose from 78.3 in September to 83.1 in October, its highest level since late 2007. This was the third consecutive monthly increase, haven risen from 72.3 in July. The measure had been expected to decline somewhat, so this result reflects increased optimism among the pubic. Given the many headwinds facing the economy right now, and with a possible fiscal cliff looming, this might be surprising.

Yet, this report is consistent with a similar one from the Conference Board a couple weeks ago, which reported Americans more cautiously upbeat about the future. Indeed, while component assessing the current economic environment also improved, the primary driver of this month’s gain was the improved expected perceptions of the coming months.

Again, this might seem counterintuitive, especially for those of us who are more concerned about the consequences of the fiscal cliff or the slowing of the global economy. But, these types of indicators often are a snapshot of feelings right now, and it might also be the case that the public does not feel that the threats from the “cliff” are as real as they are political. That disconnect is one that will be discussed more and more as we approach the end of the year, with policymakers attempting to avert the crisis.  

Chad Moutray is chief economist, National Association of Manufacturers.

Consumers became more optimistic in December, with the Survey of Consumers from University of Michigan and Thomson Reuters showing confidence at its highest level since June. The consumer sentiment index, which had fallen to 55.7 in August, rose to 67.7 in December, up 3.6 points from November.

Higher expectations for future growth helped to drive these numbers. The index for expected economic conditions increased from 55.4 last month to 61.1 now. 

Inflationary expectations remained mostly unchanged, with prices expected to rise 3.1 percent over the next year.

Overall, these numbers suggest that consumers are becoming more confident that the economy will improve. While sentiments remain subpar, this is a good sign as we move further into the holiday season. 

Chad Moutray is chief economist, National Association of Manufacturers.