Consumer confidence barely moved in July, holding to June’s high level by historic standards, according to the Consumer Confidence Index released today and conducted for The Conference Board by Neilsen, a provider of information and analytics around what Americans buy and watch.
The consumer confidence index decreased slightly to 97.3, down from 97.4 in June. The Present Situation index increased to 118.3 from 116.6 last month, however the Expectations Index slipped from June’s 84.6 to 83.3.
In 1985, the index was set to 100, representing the index's benchmark. This value is adjusted monthly based on results of a household survey of consumers' opinions on current conditions and future economic expectations. Opinions on current conditions make up 40% of the index, while expectations of future conditions make up 60%.
“Consumer confidence held steady in July, after improving in June,” said Lynn Franco, The Conference Board director of economic indicators. “Consumers were slightly more positive about current business and labor market conditions, suggesting the economy will continue to expand at a moderate pace.”
“Expectations regarding business and labor market conditions, as well as personal income prospects, declined slightly as consumers remain cautiously optimistic about growth in the near-term,” Franco said.
Those stating current business conditions are good increased to 28.1%, up from 26.8% last month, however those who say business conditions are bad rose as well from 18.3% to 19%.
Despite the recent jobs report, which showed a shocking increase from the previous month, those claiming that jobs are plentiful declined slightly from 23.2% to 23%. On the other hand, those claiming jobs are hard to get also decreased from 23.7% to 22.3%.
Consumers are not so optimistic about the short-term, as those who said, business conditions would improve in the next six months decreased from 16.6% to 15.9%. Those expecting business conditions to worsen increased from 11.2% to 12.3%.
Some say this month’s report shows that Americans are moving past Brexit uncertainty.
An article for Fox Business claims, “A gauge of U.S. consumer confidence edged lower, but was relatively unchanged in July, a sign American households are shrugging off global economic uncertainty in the wake of the Brexit vote.”
Consumer confidence remains high, and could bode well for the third quarter this year.
“The marginal decline in the Conference Board measure of consumer confidence in July left the index still at a high level by historical standards, providing further evidence that, after what could turn out to be the biggest quarterly gain in a decade in the second quarter, consumption growth will continue at a decent pace in the third quarter,” Capital Economics Assistant Economist Andrew Hunter said.
New home sales just hit an eight-year high, and while inventory is low, prices seem to be cooling off. With continued growth into the third quarter, where will that leave the housing market?
