US: Bloomberg Consumer Comfort Index

Thu Mar 19 08:45:00 CDT 2015

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Level 44.2 43.3

Americans' outlooks for the U.S. economy dimmed in March from a four-year high as feeble wage gains and harsh winter weather weighed on sentiment, according to Bloomberg. The Bloomberg Consumer Comfort Index's monthly economic expectations gauge fell to a three-month low of 51.5 from a February reading of 54 that was the strongest since January 2011. In contrast, the weekly sentiment measure improved to a one-month high of 44.2 in the period ended March 15 from 43.3.

The weekly personal finances gauge climbed to 57.1, the highest since early February, from 54.8 in the previous week. The weekly measure of Americans' views on the current state of the economy was little changed at 37.2 after 37.1. A gauge of the buying climate, which indicates whether consumers think now is a good time to purchase goods and services, was 38.3 last week after 38.2.

Some 30 percent of respondents this month said the economy is getting better, the smallest share since November. Forty-three percent said it's staying the same, up from 38 percent a month earlier. In the Northeast, where higher heating bills are coming due after temperatures plunged a month earlier, sentiment fell to the lowest level since early November. Confidence rose in the Midwest, West and South, where it climbed to the highest level since September 2007.

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.