United States
The July Conference Board Consumer Confidence index rose to 121.1 from a revised 117.3 in June. That was almost 5 pts above the estimate of 116.5. This is the 2nd best level post election with the 124.9 print in March being the best with both levels last seen in 2000. It was at 100.8 in October. Both components contributed to the headline beat with the Present Situation higher by 3.9 pts and Expectations up by 3.7 pts. The answers to the labor market questions improved further. Those that said jobs were Plentiful was up by 2.1 pts to the most since July 2001. Those that said jobs were Hard to Get fell .4 pts to the least since February 2007. After rising by 1.8 pts in June, those expecting Higher Income was down by .9 pts. Unfortunately there was a .7 pt increase in those expecting a Decrease. Business conditions for both the present and with the outlook improved.
As for buying intentions, the answers were mixed. Those that plan on buying a car/truck within 6 months was basically unchanged, up by .1 to 12.7. It peaked post election at 14. Those that plan on buying a home rose .7 pts encouragingly to 6.7, the most since the election print in November. Those that plan on buying a major appliance however fell 6 pts to the lowest level since January 2015. Lastly, one year inflation expectations held at 4.6%.
Bottom line, it’s encouraging to see the headline beat but as I’ve said many times, consumer confidence figures don’t tell us anything about the future. We’ve seen a sharp rise in confidence post election and retail sales have done nothing but continue on its very mediocre trend. This is why it’s never market moving. Also, the UoM confidence survey out on July 14th, which has the same cut off date as today’s Conference Board number, saw a 2 pt m/o/m decline to the lowest since October.
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After moderation’s in both the NY and Philly manufacturing surveys with particular softness in the internals in Philly, the July Richmond index rose to 14 from 11 (revised from 7) and that is above the estimate of 7. The key internals also saw gains m/o/m. The 6 month outlook also got better. Bottom line, the July economic data seen so far has been mixed in manufacturing, mixed in confidence and a touch lower in builder sentiment. Keep in mind that these are all confidence surveys and not actual hard data. The Q2 GDP growth rate out on Friday is expected to be up by 2.5% from 1.4% in Q1.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.