United States
Sorry for the late rundown on this as I was dropping my kid off at the camp bus. The June Conference Board Consumer Confidence index rose 1.3 pts to 118.9 and that was better than the expected drop to 116. It is up from 117.6 in May but a touch below the 119.4 print in April. The average year to date is a good 118.1 which is well above the pre election level in October of 100.8. The two main components however were mixed as the m/o/m gain was all in the Present Situation which was higher by almost 6 pts. Expectations fell by 1.7 pts.
There was a positive response to the labor market questions as jobs that are Plentiful rose 2.8 pts to the best level since August 2001. We of course see the same thing in the Job Openings data. Those that said jobs were Hard to Get fell by .3 pts to the lowest level since February 2007. Also positively, those expecting an increase in Income rose 3.1 pts to a 3 month high but there was also an increase in those expecting a decrease to a 5 month high. So, yes the labor market remains good but the question is whether this is late cycle stuff when it always is or is it something sustainable at current levels. The answer will depend partly on the supply of labor which will also dictate wage growth from here.
The answers to the household spending decision questions remain very mixed notwithstanding the headline confidence number jump since the election. Those that plan on buying a vehicle within 6 months fell .3 pts to the lowest level since July 2016 as we know what is now going on in the auto sector. Those that plan to buy a home fell .2 pts to the weakest level in 5 months. Those that plan to purchase a major appliance rose 2 pts after falling by 4.4 pts last month. Lastly, those that plan on taking a vacation within 6 months fell to the least since last June.
One year inflation expectations fell one tenth to 4.6% which is the 2nd lowest print since 2007.
The Conference Board gave this bottom line, “Overall, consumers anticipate the economy will continue expanding in the months ahead, but they do not foresee the pace of growth accelerating.” Based on the economic data we’ve seen year to date, that is pretty clear. What also is pretty clear is the improvement in consumer confidence post election hasn’t translated into much change in economic behavior and why I don’t put much stock in consumer confidence numbers and why it’s rarely market moving.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.