Consumer confidence hits seven-year high
July 31, 2014
New York--The latest data from The Conference Board shows that in July consumer confidence rose for the third straight month and reached its highest point since 2007.
The Conference Board’s Consumer Confidence Index, based on the monthly Consumer Confidence Survey conducted by Nielsen, now stands at 90.9, up from 86.4 in June and also an increase from May. (The survey is benchmarked to 1985=100, which was a fairly average result in the history of the index; it was neither a peak nor a trough.)
In addition, the Present Situation Index rose month-over-month, from 86.3 in June to 88.3 in July while the Expectations Index hit 92.7, up from 86.4.
Lynn Franco, director of economic indicators at The Conference Board, said this is the highest level consumer confidence has reached since October 2007, when the board measured it at 95.2. Strong job growth, a brighter short-term outlook for the economy and jobs, and, to a lesser extent, personal income, helped to bolster people’s outlook.
Franco said they expect consumer confidence to continue to grow in the second half of the year, particularly given the month-over-month increase in the Expectations Index and survey-takers’ general answers to questions regarding their expectations.
Those anticipating more jobs in the months ahead increased from 16 percent in June to 19 percent in July. Slightly more consumers also said they expect their incomes to grow, 17 percent in July vs. 16 percent in June. The number of survey-takers expecting a drop in income or fewer jobs to be available both fell month-over-month.
While expectations generally were positive, consumers’ outlook on the current situation was somewhat less rosy. The survey showed that those who would describe business conditions as “good” edged down, from 23.4 percent to 22.7 percent, in July while the percentage of survey-takers who said business conditions are “bad” (23 percent) held steady.
Also unchanged month-over-month was the percentage of those who said jobs are “hard to get,” which remained at 31 percent.
The Conference Board is a not-for-profit business membership and research association.
Nielsen Holdings N.V., a New York-based global information company that measures what consumers buy and watch, conducts the consumer confidence survey every month for the board. The results then are used to calculate the Consumer Confidence Index.
While up and down on a month-to-month basis, consumer confidence has shown signs of improvement throughout the first half of 2014. In February, the Present Situation Index hit 81.7, its highest level since April 2008, prior to the global financial crash.