US: Bloomberg Consumer Comfort Index

Thu Mar 12 08:45:00 CDT 2015

Actual Previous
Level 43.3 43.5

According to Bloomberg, consumer confidence was little changed last week at the second-lowest level of the year as fewer Americans said it was a good time to shop.

The Bloomberg Consumer Comfort Index retreated to 43.3 in the period ended March 8 from 43.5 in the prior week. A measure of the buying climate in the U.S. was the weakest in a month.

Bloomberg analysis suggests that disappointing wage growth and a propensity to sock away gas savings may be limiting consumers' willingness to spend, while a drop in stock prices damped enthusiasm among wealthier households. At the same time, healthy job growth will probably keep sentiment from faltering.

An index of the buying climate dropped to 38.2 last week from a reading of 39.3 in the prior period, while a measure of the state of the economy held at 37.1. The personal finances gauge rose to a three-week high of 54.8 from 54.1.

Sentiment among women last week was the strongest since August 2007, and confidence of 35- to 44-year-olds was the highest since October 2007.

Comfort among respondents in the two-highest income groups declined last week as the Standard & Poor's 500 dropped to its lowest level in almost a month. Those making $100,000 or more a year were the most downbeat since November.

Sentiment picked up for Americans making less than $15,000 a year.

The Bloomberg Consumer Comfort Index is a weekly, random-sample survey tracking Americans' views on the condition of the U.S. economy, their personal finances and the buying climate. The survey was formerly sponsored by ABC News since 1985. Beginning in April 2014, immediate details of the report are available by subscription through Langer Research Associates which conducts the survey for Bloomberg. Publicly released details are available only after a significant delay after release of the headline number. In May 2014, Bloomberg changed the series range to zero to 100 versus earlier reports with a range of minus 100 to plus 100.

The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Since consumer spending accounts for such a large portion of the economy, the markets are always eager to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. It is easy to see how this index of consumer attitudes gives insight to the direction of the economy. The Bloomberg Consumer Comfort Index is produced by Langer Research Associates of New York. Each release includes results among 1,000 randomly selected adults, with breakdowns available by age, race, sex, education, political affiliation and other groups. The Index has significant long-term correlations, including on a time-lagged basis, with a variety of key economic indicators. The index, produced by Langer Research Associates in New York, is derived from telephone interviews with a random sample of about 250 consumers a week aged 18 or over, and is based on a four-week moving average of 1,000 responses. The percentage of households with negative views on the economy, personal finances and buying climate is subtracted from the share with positive outlooks. The results can range from zero to 100. Prior to May 2014, the data were reported in a range of minus 100 to plus 100.