Eye On Housing
The Consumer Confidence Index, reported by the Conference Board, was virtually unchanged in July.
In July, the Consumer Confidence Index was 97.3, similar to 97.4 in June. The present situation index rose to 118.3, from 116.6, while the expectations index fell to 83.3, from 84.6.
Consumers’ assessments of current business conditions were mixed. Assessments shifted to the extremes of “good” and “bad” and away from “normal.” The share of respondents rating business conditions “good” rose from 26.8% to 28.1% and the share of respondents assessing business conditions “bad” increased from 18.3% to 19.0%. The net gains in assessments of “good” and “bad” came from a net decline in respondents rating business conditions “normal”.
Expectations of business conditions over the next six months became more pessimistic in July. The share of respondents expecting future business conditions to be worse rose 1.1 percentage points, from 11.2% to 12.3%, with net declines in respondents expecting business conditions to be better and the same.
Similar to the mixed assessments of current business conditions, consumers’ assessments of current employment conditions were complicated. The share of respondents reporting that jobs were “not so plentiful” increased from 53.1% to 54.7%, but the increase drew from both upgrades and downgrades in assessments. Most of the 1.6 percentage point increase (1.4%) was the result of a net decline in assessments of “jobs hard to get”, an upgrade, while the rest was the result of a net decline in assessments of “jobs plentiful”, a downgrade.
Consumers were cautiously optimistic about the near term outlook for employment. The share of respondents expecting “fewer jobs” declined by 0.7 percentage points, but the bulk of the shift was to “same jobs” (0.6) rather than “more jobs” (0.1).
The Conference Board also reports the shares of respondents planning to buy a home within six months. The share of respondents planning to buy a home rose to 4.9%, from 4.8%. The share of respondents planning to buy a newly constructed home and an existing home were 1.3% and 2.8%, respectively; the share of respondents who were “uncertain” whether they would buy a newly constructed or an existing home was 0.8%.
The trend in the share of respondents planning to buy a home within six months has been steadily upward since the end of the recession, suggesting growing optimism among consumers about the housing market.
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