US: Bloomberg Consumer Comfort Index

Thu Apr 16 08:45:00 CDT 2015

Actual Previous
Level 46.6 47.9

Consumer confidence cooled last week from an almost eight-year high as Americans took a less favorable view of their finances and the economy.

The Bloomberg Consumer Comfort Index fell to 46.6 in the period ended April 12, from the prior week's 47.9 reading that was the strongest since May 2007. The economic expectations gauge for April declined for a second month.

The comfort index's outlook gauge for April fell to 50, a five-month low, from 51.5. The share of households saying the economy is improving held at 30 percent and equaled the fraction believing its weakening.

The Bloomberg weekly comfort gauge remains well above last year's average of 36.7, which was the best since 2007.

Among its three components, the measure of personal finances fell to 58.4 last week from 60.5. The index of Americans' views on the state of the economy dropped to 37.7 from 39.5. A gauge of the buying climate, showing whether this is a good time to purchase goods and services, was little changed at 43.7 compared with 43.8 the prior week.

Moods improved for Americans at the top of the wage scale and worsened for those at the bottom. The comfort gauge for workers earning $100,000 or more climbed to 71.9, its second-highest level since August 2007. For the under $50,000 category, it fell to 34.5 last week from 36.1. The 37.4-point gap is the second-biggest between the groups so far this 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.