The Conference Board compiles a survey of consumer attitudes on present economic conditions and expectations of future conditions. Five thousand consumers across the country are surveyed each month. While the level of consumer confidence is associated with consumer spending, the two do not move in tandem each and every month. Why Investors Care
| Released on 7/31/07 For Jul 2007 | ||||||||||||
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Highlights
The Conference Board reports a surprise jump in consumer confidence, to 112.6 in July from 105.3 in June. Strength was centered in job readings, data that will raise expectations for strength in monthly payroll growth. Those saying jobs are "hard to get" fell 2.1 percentage points to 18.4 percent while those saying jobs are plentiful rose 2.9 points to 30.5 percent.
Another positive in the report was the 12-month inflation outlook, easing 3 tenths to 5.1 percent. A steadying in gas and food prices, though at high levels, is no doubt behind the improvement. Buying plans also improved with more saying they will buy a car over the next six months, 7.2 percent vs. 6.0 percent, and even more saying they will buy a house, 3.1 percent vs. 2.9 percent.
Treasuries eased and the dollar firmed in immediate reaction to the results which offer a new sense of strength to the economic outlook. Vehicle sales tomorrow will offer clues whether this improvement in confidence is leading to higher consumer spending.
The Conference Board's consumer confidence index fell sharply to 103.9 in June from 108.5 in May. Assessments of both the present situation and future outlook fell back. And inflation expectations failed to improve, showing 12-month expectations at 5.4 percent unchanged from May. But last week, the end-of-month reading of the Reuter's/University of Michigan consumer sentiment index showed some strength, largely holding onto a mid-month level that was above June's. A gain in the Conference Board's index would help confirm that the consumer sector is not weakening.
Consumer confidence Consensus Forecast for July 07: 105.0
Range: 103.0 to 109.0
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Typically retail sales will move in tandem with consumer optimism - although not necessarily each and every month. |
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