ANN ARBOR, Mich., and NEW YORK (11/27/13)--Three different indexes of consumer confidence revealed mixed feelings about the U.S. economy on the day before Thanksgiving.
The University of Michigan Consumer Confidence Index and Bloomberg Consumer Comfort Index both revealed that consumers have a rosier outlook. The University of Michigan measure increased by 1.9 points in November to 75.1, while the Bloomberg gauge rose by 0.9 points to -33.7 for the week ending Nov. 24.
Meanwhile, the Confidence Index released by the Conference Board, a New York-based research firm, unexpectedly fell in November to a seven-month low of 70.4, down from 72.4. Economists surveyed by Bloomberg forecast an overall reading of 72.6 (Bloomberg.com Nov. 27) while economists polled by Dow Jones Newswires predicted the measure to rise to 73 (WSJ.com Nov. 27).
The reports reveal clashing views on expectations. The expectation index boosted the overall University of Michigan numbers. It rose by 4.3 points in November to 66.8, while the university's present conditions reading fell 1.9 points to 88. The Conference Board found survey respondents to be more pessimistic, however, with its expectations monitor falling to 69.3 from 72.2. Its gauge of present conditions fell only slightly--to 72.0 from 72.6 in October.
The University of Michigan indicated that consumers are buoyed by a steady labor market, rising home values, and fading memories of October's partial government shutdown (Economy.com Nov. 27), but the measure's overall confidence levels are still well below what they were in the summer, when they ranged from 82.1 to 85.1 between June and August.
The Bloomberg report indicates that consumers are feeling most confident about the state of their own personal finances, which gained 2.2 points, with real income rising due to holiday sales (Economy.com Nov. 27). Underpinning this was the fact that, broken down into income brackets, people making between $40,000 and $50,000 saw their confidence increase the most--by 6.9 points. A measure of the overall state of the economy also increased by 1.2 points to -62.5, while the buying climate component of the index fell by 0.5 points to -38.7.
Underlying the Conference Board survey's pessimism were low expectations for the labor market. The number of Americans who said jobs would be more abundant in the next half-year declined by 3.3 percentage points to 12.7%--the lowest that the number has been since November 2011. The proportion of respondents who expected a raise in their incomes in the next six months declined to 14.9% from 15.7%, reaching an eight-month low.
The report did reveal, however, that Americans are feeling more confident about the current state of the labor market--11.8% of respondents said jobs are plentiful, an increase of 0.2 percentage points, while 34% of respondents said jobs are harder to find, a decrease of 0.9 percentage points.
Bloomberg analysts said that more employment opportunities and wage gains would boost the Conference Board's confidence measures, given that household purchases make up 70% of the U.S. economy (Bloomberg.com Nov. 27). Moody's analysts, assessing the report, also pointed out that there are nearly three unemployed workers for every vacancy, leaving employers with little incentive to boost consumer spending through wage increases (Economy.com Nov. 27).