The Conference Board’s Consumer Confidence Index (CCI) and the University of Michigan Consumer Sentiment Survey reported consumer confidence moving in opposite directions this month. The CCI indicated a modest gain while the University of Michigan survey showed a slight decrease in consumer confidence versus last month. While the month-to-month changes for each index have not been entirely consistent with one another, the 3-month moving average of both indexes do reveal that consumer confidence has trended lower from multi-year highs over the course of the last few months. Nonetheless, the recent downward trend in consumer confidence is (at least thus far) smaller than the one observed a year ago when fears of a double-dip recession were quite high.
Sluggish labor market conditions are a possible factor in explaining the downtrend in consumer confidence. According to the CCI, more than 92 percent of respondents have characterized jobs as either “not so plentiful” or “hard to get” and 82 percent anticipate either fewer jobs or the same level at best 6 months from now. On a positive note, consumers remain optimistic with regard to the buying environment for homes. As of July, more than three-fourths of consumers indicated that buying conditions are currently “good”. Low prices and low interest rates represent the most reported choices as to why it is a good time to buy a home.