Eye On Housing
After two consecutive months of decline, the Consumer Confidence Index, reported by the Conference Board, rose in June.
The Consumer Confidence Index rose to 98 in June, from 92.4 in May. Both the present situation index and the expectations index increased. The present situation index rose to 118.3 in June, from 113.2 in May, and the expectations index rose to 84.5, from 78.5 in May.
Consumers’ confidence in current business conditions increased in June, but the improvement was qualified. The share of respondents rating business conditions “bad” declined from 21.4% to 17.7%. However, over three quarters of the net reduction in the share of respondents assessing business conditions as “bad” contributed to a net increase in assessments of “normal” with only the remainder contributing to the net increase in assessments of “good”. This shift might be viewed as less pessimistic rather than more optimistic.
In comparison, expectations of business conditions six months from now were more enthusiastic. The share of respondents expecting better business conditions rose 1.8 percentage points, from 15.0% to 16.8%, with net gains coming from a small net decline in the share of respondents expecting future business conditions to be worse, but mainly from a net increase in respondents expecting business conditions to be better rather than just the same.
Similar to the qualified improvement in assessments of current business conditions, consumers’ assessments of current employment conditions were also mixed. The share of respondents reporting that jobs were “not so plentiful” increased from 51.0% to 53.3% in June, but the net increase drew from both upgrades and downgrades in assessments. About half of the 2.3 percentage point net increase (1.2%) was the result of a net decline in assessments of “jobs hard to get”, an upgrade, while the other half was the result of a net decline in assessments of “jobs plentiful”, a downgrade.
And similar to more robust expected improvements in business conditions, consumers were quite optimistic about the short-term outlook of employment conditions in June. The share of respondents expecting “more jobs” over the next six month rose 1.7 percentage points driven mainly by a net increase in the share of assessments of employment opportunities being the same and a smaller net decline in the share of respondents expecting “fewer jobs”.
The Conference Board also reported the shares of respondents planning to buy a home within six months. The share of respondents planning to buy a lived-in home within six months slipped down to 2.5% in June, from 3.7% in May. The share of respondents planning to buy a new home within six months rose slightly to 1.3% in June, from 1.0% in May.
Overall, despite the monthly volatility, the trends in the shares of respondents planning to buy a new home and the shares of respondents planning to buy a lived-in home within six months are steadily upward since the recession.
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