Consumer Confidence for July at 10-Month Low

Consumer confidence took a big hit in July, according to the Conference Board with a decline from June’s 99.8 to a 10-month low of 90.9. In addition there was a downward revision to June’s result. It was a steep slide in the expectations subcomponent that pulled the composite value lower.

The official news release from the Conference Board included at the end of this piece draws quite negative conclusions on a month over month basis. In our opinion this month’s outcome is another example of why not to get too carried away by one month’s result in either direction. The composite value combines the view of the present situation and expectations and its three month moving average (3MMA) declined by 1.1 points. The 3MMA of the view of the present situation improved by 0.8 points and expectations declined by 2.4 points. The composite value of consumer confidence has been much more erratic this year than it was in 2014. In all of last year the monthly change ranged from + 5.1 to – 4.4, this year the range has been + 10.7 to – 8.9 points. There is no multi month trend in recent data therefore we see no reason to be concerned about the July result which is slightly higher than the 25 year average. The 3MMA of the present situation continues to be above the five year trend line and that of expectations is now slightly below its 5 year trend line (Figure 1).