Measures of consumer confidence were mixed in the most recent release. The Conference Board reported that the Consumer Confidence Index increased by 3.2 points on a month-over-month seasonally adjusted basis in December to 80.7. Meanwhile, according to Thomson Reuters and the University of Michigan, the Consumer Sentiment Index fell by 2.1 points.
The month-over-month improvement in the Consumer Confidence Index was attributed to favorable assessment of the current business conditions. The drop in the Consumer Sentiment Index was attributed to the concern of insufficient growth in income. Looking ahead, respondents of both surveys remain concerned with insufficient job growth.
According to the Conference Board, the share of consumers planning to buy a home in the next 6 months was 6.0% on a seasonally adjusted 3-month moving average basis. Over this same period, the share of respondents planning to purchase a “lived-in” home increased slightly to 3.2%. The share of respondents planning to purchase a new home was 0.9%.
In a related survey, the Survey of Consumer Expectations (CSE), the Federal Reserve Bank of New York produces a monthly series on consumer’s views on the labor market and household finance. The survey also includes data on the expectation of consumers to changes in home prices.
Results from the December 2013 survey find that the median expected home price change one-year ahead was 3.88%. Expectations differed by region, with the highest median expected home price change of 4.77% in the South. The lowest median expected home price change was 3.02% in the Midwest. The expectations appear to be consistent with recent data showing home prices increasing at a more moderate pace.
Mixed results from measures of consumer confidence during the final month of 2013 should not be a surprise. In 2013, many consumers saw significant appreciation in home values and above average gains in the stock market. These increases, however, were not accompanied by significant improvement in labor market conditions. The results suggest consumers are cautiously optimistic but remain concerned with lackluster growth in income and jobs.