US: Bloomberg Consumer Comfort Index

Thu Apr 30 08:45:00 CDT 2015

Actual Previous
Level 44.7 45.4

Bloomberg's consumer confidence index declined for a third consecutive week to a six-week low of 44.7 as Americans took a less favorable view of their finances and the slowdowns at factories and oilfields soured attitudes among men. Sentiment among men showed one of the biggest decreases in the past four years, while confidence in the Midwest slumped by the most in more than a decade. While the Bloomberg comfort gauge cooled from an almost eight-year high reached earlier this month, it remains well above last year's average of 36.7, which was the best since 2007.

All three components of the index retreated last week. The measure of personal finances fell to a seven-week low of 55.6 from 56 the prior period. The gauge of Americans' views on the state of the economy eased to 37.3 from 37.6, while the index of the buying climate, showing whether this is a good time to purchase goods and services, decreased to 41.2 from 42.5.

Sentiment among males deteriorated for a third week, with the gauge declining to 46.7 from 50.3. The 3.6-point drop matched the second-biggest decrease since 2011. In contrast, confidence among women rose, helping to narrow the gender gap.

The Midwest was the only region in which sentiment declined last week -- a 7.7 point decrease that was the biggest since February 2004. The area includes the industrial states of Michigan, Illinois, Indiana and Ohio, as well as North Dakota, the second-largest crude-oil producer.

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.