Consumer Confidence Increases in July

Consumer confidence increased in July after a small dip in June, but the three-month moving average (3MMA) advanced in each of those months, according to The Conference Board’s Consumer Confidence Survey.

The composite value of consumer confidence in July was 127.4, up from 127.1 in June. The 3MMA increased from 127.2 in June to 127.8 in July, which was 9.5 points higher than in July last year. We prefer to smooth the data with a moving average because of monthly volatility, which in the case of consumer confidence has been quite extreme since the beginning of 2016. The composite index is made up of two sub-indexes. These are the consumer’s view of the present situation and his or her expectations for the future. Both are above their nine-year trend line though expectations are drifting down (Figure 1).