United States
The May final UoM consumer confidence index fell to 97.1 from 97.7 initially and that is .4 pts below the estimate. It’s basically little changed from the 97 level seen in April and compares with the pre election figures of 91.2 in September and 87.2 in October and vs the post election peak of 98.5 in January. The components were mixed as Current Conditions fell 1 pt from the both the preliminary print and from April while Expectations were flat with April but down slightly from the first May look. One year inflation expectations held at 2.6% from the first read and up one tenth from April. I don’t bother looking at the 5-10 yr inflation expectations component because that’s worthless soothsaying so many years into the future.
The positive within the report was the rise in those expecting Higher Income to the highest level since December. It still is below where it was in early 2015 but signs still point to a pick up in wage/salary growth. The outlook on the jobs market was somewhat subdued as its at its lowest level also since December. From April, spending decisions were down across the board. Those that said it’s a good time to buy a vehicle was down by 17 pts to the lowest level since August 2014 (for reasons becoming very clear). Those that said it’s a good time to BUY a home fell 10 pts to the lowest since September 2011 while those that said it’s a good time to SELL a home was higher by 7 pts to the most since October 2005. Ya think pricing has anything to do with that? The UoM said, “For the first time since 2006 more consumers complained about high home prices than cited low home prices.” Lastly, the partisan gap between the two parties remains on their outlook on the economy.
Bottom line, consumer confidence is still holding at near the highest level in this recovery with the added lift post election. However, my readers know that the consumer confidence data is not a leading indicator and really only a measure of how people feel right now. Also, how they feel doesn’t always equate to how they will economically behave.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.