Another set of monthly mixed results for consumer confidence was reported as the Consumer Sentiment Index decreased while the Consumer Confidence Index increased slightly.
According to Thomson Reuters and the University of Michigan, the Consumer Sentiment Index fell in August by 3 points from the previous month’s six-year high of 85.1. Meanwhile after declining in July, the Conference Board reported that the Consumer Confidence Index increased slightly by 0.5 points, 0.6%, on a month-over-month seasonally adjusted basis in August to 81.5.
After sustained gains in both indices at the end of 2012 and the start of 2013, both measures of consumer confidence have leveled off in recent months as slow growth continues for employment and the national economy.
According to the Conference Board, the share of consumers planning to buy a home in the next 6 months fell slightly in August. The share of consumers planning to buy a home in the next 6 months fell by 0.1 percentage point to 5.8% on a seasonally adjusted 3-month moving average basis. Over this same period, the share of respondents planning to purchase a “lived-in” home was 3.6% and the share of respondents planning to purchase a new home was 1.1%.
The leveling off in the share of consumers planning to purchase a new home may capture the effect of increasing mortgage interest rates. In fact, the share of respondents expecting higher interest rates in the next 12 months increased in August by 5.4 percentage points to 66.2% on a seasonally adjusted 3-month moving average basis. The last time consumer expectations for higher interest rates were this high was September 2006.