Economic Snapshot: Consumer confidence declines after September increase

After a moderate increase in September, consumer confidence declined in October. Consumer confidence has been bouncing back and forth for most of the year, but it remains higher than October 2014 when it was 94.5, the highest level the index had seen since 2007 at the time.

Consumer confidence

Consumer confidence declined in October, which now stands at 97.6, down from 102.6 in September. The Present Situation Index decreased from 120.3 to 112.1 and the Expectations Index declined from 90.8 to 88.0.

Consumers saying business conditions are “good” decreased from 28.1 to 26.5 percent and those claiming business conditions are “bad” increased from 16.4 to 18.3 percent. Consumers stating jobs are “plentiful” decreased from 24.8 to 22.2 percent and those claiming jobs are “hard to get” increased from 24.9 to 25.8 percent.

The percentage of consumers expecting business conditions to improve over the next six months was unchanged at 18.1 percent, while those expecting business conditions to worsen increased marginally from 10.4 to 10.6 percent.

Those anticipating more jobs in the months ahead declined from 14.9 to 14.5 percent and those anticipating fewer jobs increased from 15.9 to 16.9 percent. The proportion of consumers expecting their incomes to increase declined from 18.7 to 18.0 percent and the proportion expecting a decline increased from 9.9 to 10.7 percent.

Advertisement

New home sales

Sales of new single-family houses were at a seasonally adjusted annual rate of 468,000 in September. This is 1.5 percent below the revised August rate of 529,000 but is 2.0 percent above the September 2014 estimate of 459,000.

The median sales price of new homes sold in September was $296,000 and the average sales price was $364,100. The seasonally adjusted estimate of new houses for sale at the end of September was 225,000, which represents a supply of 5.8 months at the current sales rate.

GDP

Real gross domestic product increased at an annual rate of 1.5 percent in the third quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.9 percent.

The deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and decelerations in exports, nonresidential fixed investment, state and local government spending, personal consumption expenditures (PCE) and residential fixed investment. These were partly offset by a deceleration in imports.

The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, state and local government spending, nonresidential fixed investment, exports and residential fixed investment. These were partially offset by negative contributions from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

Disposable personal income increased $155.9 billion, or 4.8 percent, in the third quarter, compared with an increase of $112.2 billion, or 3.4 percent, in the second. Real disposable personal income increased 3.5 percent, compared with an increase of 1.2 percent in the previous quarter.

The “advance” estimate is based on source data that is incomplete or subject to further revision by the source agency.

Leave a Reply

Your email address will not be published. Required fields are marked *

*