US Economic Briefing: Consumer Confidence

US Economic Briefing: Consumer Confidence ember 8, 17 Dr. Edward Yardeni 51-97-783 eyardeni@ Debbie Johnson --1333 djohnson@ Mali Quintana --1333 aquintana@ Please visit our sites at www. blog. thinking outside the box

Table Of Contents Table Of Contents Consumer Confidence & Sentiment 1 Consumer Optimism Consumer Confidence 3- Consumer Confidence & Unemployment 7-8 Consumer Confidence & Employment 9-11 Consumer Sentiment 1 Consumer Confidence By Region 13- Consumer Optimism Index 1 Jobs Plentiful & Wage Inflation 17 Consumer Confidence & Wage Inflation 18-1 ember 8, 17 / Consumer Confidence www.

Consumer Confidence & Sentiment 1 Figure 1. 1 1 1 1 CONSUMER SURVEYS Consumer Confidence Index (1985=, sa) Consumer Sentiment Index (Q1-19=, nsa) 1 1 1 5 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 CURRENT CONDITIONS Consumer Confidence Index (1985=, sa) Consumer Sentiment Index (Q1-19=, nsa) 5 5 5 1 1 13 1 11 9 7 5 3 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 EXPECTATIONS Consumer Confidence Index (1985=, sa) Consumer Sentiment Index (Q1-19=, nsa) 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board and the University of Michigan Survey Research Center. 1 1 13 1 11 9 7 5 3 Page 1 / ember 8, 17 / Consumer Confidence www.

1 Figure. CONSUMER OPTIMISM INDEX* Consumer Optimism 1 1 1 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 1 1 1 CURRENT CONDITIONS 1 1 1 13 11 9 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 EXPECTATIONS 13 11 9 7 7 5 5 3 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 * Average of Consumer Sentiment Index (nsa) and Consumer Confidence Index (sa). Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board and the University of Michigan Survey Research Center. 3 Page / ember 8, 17 / Consumer Confidence www.

Consumer Confidence 5 15 Figure 3. CONSUMER CONFIDENCE INDEX (1985=, sa) 5 15 135 15 Total (19.5) 135 15 1 1 95 95 85 85 75 75 5 5 55 55 5 5 35 35 5 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: The Conference Board. 5 1 Figure. CONSUMER CONFIDENCE INDEX (1985=, sa) 1 1 1 1 1 1 1 Consumer Confidence Index (19.5) Current Conditions Component (3.9) Expectations Component (113.3) 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: The Conference Board. Page 3 / ember 8, 17 / Consumer Confidence www.

Consumer Confidence 1 1 Figure 5. CONSUMER CONFIDENCE INDEX (1985=, sa) Current Conditions Component (3.9) Expectations Component (113.3) 1 1 1 1 1 1 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: The Conference Board. 1 Figure. CONSUMER CONFIDENCE INDEX (1985=, sa) 1 1 1 1 1 1 1 Consumer Confidence Index (19.5) Current Conditions Component (3.9) Expectations Component (113.3) 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: The Conference Board. Page / ember 8, 17 / Consumer Confidence www.

Consumer Confidence 1 1 Figure 7. CONSUMER CONFIDENCE INDEXES BY AGE GROUPS (1985=, sa) 1 1 1 1 Age Group Under 35 (139.8) 35-5 (15.7) 55+ (19.8) 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: The Conference Board. 1 1 Figure 8. CONSUMER OPTIMISM INDEX* 1 1 1 1 Total (11.) Present (133.7) Expectations (11.1) 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 * Average of Consumer Sentiment Index and Consumer Confidence Index. Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board and the University of Michigan Survey Research Center. Page 5 / ember 8, 17 / Consumer Confidence www.

7 5 55 5 5 Figure 9. Consumer Confidence CONSUMER CONFIDENCE SURVEY: JOBS AVAILABLITY (percent saying so) Jobs Plentiful* (37.1) Jobs Hard To Get* (1.9) 7 5 55 5 5 35 3 5 1 5 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 35 3 5 1 5 * Every other month from 197 through mid-1977, then monthly since July 1977. Seasonally adjusted. Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board. 75 5 5 Figure 1. CONSUMER CONFIDENCE SURVEY: CURRENT CONDITIONS & JOBS AVAILABILITY Jobs Plentiful Minus Jobs Hard To Get* (percent saying so) (.) Current Conditions Index (3.9) 175 15-5 75 5-5 5-75 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 * Every other month from 197 through mid-1977, then monthly since July 1977. Seasonally adjusted. Source: The Conference Board. Page / ember 8, 17 / Consumer Confidence www.

Consumer Confidence & Unemployment 1 Figure 11. CONSUMER CONFIDENCE SURVEY: UNEMPLOYMENT RATE & JOBS AVAILABILITY 75 1 Jobs Hard To Get* (percent saying so) 1 5 8 3 Unemployment Rate (percent) 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 * Every other month from 197 through mid-1977, then monthly since July 1977. Seasonally adjusted. Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board and Bureau of Labor Statistics. 75 Figure 1. UNEMPLOYMENT RATE & CONFIDENCE (sa) Jobs Hard To Get (percent saying so) 5 3 1 U- Unemployment Rate* (percent) 7 7 7 7 78 8 8 8 88 9 9 9 9 98 8 1 1 1 1 18 5 Note: Shaded areas denote recessions according to the National Bureau of Economic Research. * Total unemployed plus all marginally attached workers plus total employed part time for economic reasons as percent of civilian labor force plus all attached workers. Source: The Conference Board and US Department of Labor. Page 7 / ember 8, 17 / Consumer Confidence www.

Figure 13. Consumer Confidence & Unemployment CONSUMER CONFIDENCE & UNEMPLOYMENT CLAIMS (sa) Initial Unemployment Claims (thousands, -week ma) 7 5 3 Jobs Hard To Get (percent saying so) 11/18 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board and US Department of Labor. 1 75 7 5 55 5 5 35 3 5 Figure 1. CONSUMER CONFIDENCE SURVEY: UNEMPLOYMENT CLAIMS & JOBS AVAILABILITY (sa) Jobs Hard To Get* (percent saying so) Initial Unemployment Claims (thousands, sa, -week ma) 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 11/18 75 5 3 * Every other month from 197 through mid-1977, then monthly since July 1977. Seasonally adjusted. Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board and US Department of Labor. Page 8 / ember 8, 17 / Consumer Confidence www.

1 Figure. Consumer Confidence & Employment EMPLOYMENT & CONSUMER SENTIMENT 7 5 3 1-1 Consumer Sentiment Index (Q1-19=, nsa) Payroll Employment (yearly percent change) -3 5 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 EMPLOYMENT & CONSUMER CONFIDENCE Consumer Confidence Index (1985=, sa) Payroll Employment (yearly percent change) 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1-5 7 5 3 1-1 - -3 - -5 1 EMPLOYMENT & CONSUMER OPTIMISM 8 1 Consumer Optimism Index* - Payroll Employment (yearly percent change) - 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 * Average of Consumer Sentiment Index (nsa) and Consumer Confidence Index (sa). Source: The Conference Board, University of Michigan Survey Research Center, and US Department of Labor. - Page 9 / ember 8, 17 / Consumer Confidence www.

5 5 35 3 Figure 1. Consumer Confidence & Employment CONSUMER CONFIDENCE: EMPLOYMENT EXPECTATIONS (sa) Percent Expecting More Jobs Months From Now Percent Expecting Fewer Jobs Months From Now 5 5 35 3 5 5 1 5 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: The Conference Board. 1 5 18 1 Figure 17. CONSUMER CONFIDENCE: EMPLOYMENT EXPECTATIONS (sa) 13 1 11-9 -1 7-18 - -3-3 Percent Expecting More Jobs Minus Percent Expecting Fewer Jobs Consumer Confidence Expectations Index 5 3-95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: The Conference Board. Page 1 / ember 8, 17 / Consumer Confidence www.

9 Figure 18. Consumer Confidence & Employment CONSUMER CONFIDENCE: BUSINESS CONDITIONS (sa) 9 7 7 5 3 Business Conditions Months Ahead Better Worsen Same 5 3 1 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: Conference Board. 1 1 Figure 19. CONSUMER CONFIDENCE: HOME 1 1 Plans to Buy Within Months: Home (% of respondents, sa) 1 8 8 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: Conference Board. Page 11 / ember 8, 17 / Consumer Confidence www.

13 1 Figure. CONSUMER SENTIMENT INDEX (Q1-19=, nsa) Consumer Sentiment 13 1 11 11 9 9 7 7 5 Consumer Sentiment Index (98.5) Current Conditions (113.5) Expectations (88.9) 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: University of Michigan Survey Research Center. 5 13 1 11 Figure 1. CONSUMER SENTIMENT INDEX (Q1-19=, nsa) 13 1 11 9 9 7 7 5 Current Conditions (113.5) Expectations (88.9) 8 1 1 1 1 18 Source: University of Michigan Survey Research Center. 5 Page 1 / ember 8, 17 / Consumer Confidence www.

Consumer Confidence By Region 1 1 1 Figure. CONSUMER CONFIDENCE INDEX (1985=, sa) New England* Current Conditions 5 5 1 New England* Expectations 175 15 75 5 5 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 135 1 9 75 Middle Atlantic* Middle Atlantic* Current Conditions Expectations 1 1 1 1 5 3 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 1 1 1 South Atlantic* South Atlantic* Current Conditions Expectations 5 175 15 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 * New England (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, Vermont); Middle Atlantic (New Jersey, New York, Pennsylvania); South Atlantic (Delaware, Maryland, Washington DC, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida). Source: The Conference Board. 75 5 5 Page 13 / ember 8, 17 / Consumer Confidence www.

Consumer Confidence By Region 1 1 1 1 Figure 3. CONSUMER CONFIDENCE INDEX (1985=, sa) East North Central* East North Central* Current Conditions Expectations 1 1 1 1 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 1 1 1 East South Central* East South Central* Current Conditions Expectations 1 1 1 1 1 1 13 1 11 9 7 5 3 97 99 1 3 5 7 9 11 13 17 19 1 West North Central* 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 West North Central* Current Conditions Expectations 97 99 1 3 5 7 9 11 13 17 19 1 * East North Central (Ohio, Indiana, Illinois, Michigan, Wisconsin); East South Central (Kentucky, Tennessee, Alabama, Mississippi); West North Central (Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, Kansas). Source: The Conference Board. 1 1 1 1 Page 1 / ember 8, 17 / Consumer Confidence www.

Consumer Confidence By Region 1 1 1 1 Figure. CONSUMER CONFIDENCE INDEX (1985=, sa) West South Central* West South Central* Current Conditions Expectations 185 17 5 1 15 11 95 5 5 35 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 1 1 1 Mountain* 1 1 1 1 1 Mountain* Current Conditions Expectations 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 1 1 1 Pacific* Pacific* Current Conditions Expectations 1 1 1 1 97 99 1 3 5 7 9 11 13 17 19 1 97 99 1 3 5 7 9 11 13 17 19 1 * West South Central (Arkansas, Louisiana, Oklahoma, Texas); Mountain (Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah, Nevada); Pacific (Washington, Oregon, California, Alaska, Hawaii). Source: The Conference Board. Page / ember 8, 17 / Consumer Confidence www.

17 Figure 5. CONSUMER OPTIMISM INDEX* Consumer Optimism Index 17 13 13 11 11 9 9 7 7 5 3 Total Current Conditions Expectations 7 9 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9 11 13 17 19 1 5 3 * Average of Consumer Sentiment Index (nsa) and Consumer Confidence Index (sa). Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: The Conference Board and the University of Michigan Survey Research Center. 38 3 3 3 Figure. NFIB: JOB OPENINGS & JOBS PLENTIFUL (sa) NFIB: Firms with One or More Job Openings (1-month average, percent) (31.8) Oct 55 5 5 3 8 Jobs Plentiful (percent saying so) (37.1) 35 3 5 18 1 1 1 1 8 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: Bureau of Labor Statistics and National Federation of Small Business. 1 5 Page 1 / ember 8, 17 / Consumer Confidence www.

5 55 5 5 35 3 5 1 5 Figure 7. Jobs Plentiful & Wage Inflation ECI WAGES & SALARIES vs JOBS PLENTIFUL (sa) ECI: Wages & Salaries Private Industry (yearly percent change) Jobs Plentiful* (percent saying so) 8 83 8 85 8 87 88 89 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Q3 9.5 9. 8.5 8. 7.5 7..5. 5.5 5..5. 3.5 3..5. 1.5 1. * Every other month from 197 thru mid-1977, monthly data begins in July 1977. Seasonally adjusted. Source: Bureau of Labor Statistics and Conference Board. Page 17 / ember 8, 17 / Consumer Confidence www.

Consumer Confidence & Wage Inflation 1 1 Figure 8. CONSUMER OPTIMISM INDEX vs. WAGES & SALARIES 1 1 8 1 Sep Consumer Optimism Index (11.) - Wages & Salaries (yearly percent change (3.) - - 13 1 11 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 CONSUMER SENTIMENT INDEX vs. WAGES & SALARIES -8 1 9 Sep 5 7 Consumer Sentiment Index (19=) (98.5) 5 Wages & Salaries (yearly percent change (3.) -5 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19-1 1 1 1 CONSUMER CONFIDENCE INDEX vs. WAGES & SALARIES 1 1 8 Consumer Confidence Index (1985=) (19.5) Wages & Salaries (yearly percent change (3.) 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: University of Michigan, The Conference Board, and Bureau of Economic Analysis. Sep - - - -8 Page 18 / ember 8, 17 / Consumer Confidence www.

Consumer Confidence & Wage Inflation 1 1 Figure 9. CONSUMER OPTIMISM INDEX vs. WAGES & SALARIES 1 1 8 1 Sep Consumer Optimism Index: Present Situation (133.7) Wages & Salaries (yearly percent change (3.) - - - 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19-8 13 1 11 CONSUMER SENTIMENT INDEX vs. WAGES & SALARIES 1 9 Sep 5 7 Consumer Sentiment Index: Current Conditions (19=) (113.5) 5 Wages & Salaries (yearly percent change (3.) -5 5 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 CONSUMER CONFIDENCE INDEX vs. WAGES & SALARIES Consumer Confidence Index: Current Conditions (1985=) (3.9) Wages & Salaries (yearly percent change (3.) 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: University of Michigan, The Conference Board, and Bureau of Economic Analysis. Sep -1 1 1 8 - - - -8 Page 19 / ember 8, 17 / Consumer Confidence www.

Consumer Confidence & Wage Inflation 1 1 Figure 3. CONSUMER OPTIMISM INDEX vs. WAGES & SALARIES 1 1 8 1 Consumer Optimism Index: Expectations (11.1) Wages & Salaries (yearly percent change (3.) - - - 1 11 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 CONSUMER SENTIMENT INDEX vs. WAGES & SALARIES -8 1 9 7 5 Consumer Sentiment Index: Expectations (19=) (88.9) Wages & Salaries (yearly percent change (3.) 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Sep 5-5 -1 1 1 CONSUMER CONFIDENCE INDEX vs. WAGES & SALARIES 1 1 8 Sep Consumer Confidence Index: Expectations (1985=) (113.3) Wages & Salaries (yearly percent change (3.) 9 91 9 93 9 95 9 97 98 99 1 3 5 7 8 9 1 11 1 13 1 1 17 18 19 Source: University of Michigan, The Conference Board, and Bureau of Economic Analysis. - - - -8 Page / ember 8, 17 / Consumer Confidence www.

Figure 31. Consumer Confidence & Wage Inflation CONSUMER CONFIDENCE INDEX & PAYROLL EMPLOYMENT Present Situation Component (1985=, sa) (3.9) Oct - 5 Payroll Employment (yearly percent change) (1.) 8 7 7 7 7 78 8 8 8 88 9 9 9 9 98 8 1 1 1 1 18 Source: The Conference Board and US Department of Labor, Bureau of Labor Statistics. - - Figure 3. CONSUMER CONFIDENCE INDEX & HOUSEHOLD EMPLOYMENT Present Situation Component (1985=, sa) (3.9) Oct - 5 Household Employment (yearly percent change) (1.3) 8 7 7 7 7 78 8 8 8 88 9 9 9 9 98 8 1 1 1 1 18 Source: The Conference Board and US Department of Labor, Bureau of Labor Statistics. - - Page 1 / ember 8, 17 / Consumer Confidence www.

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