US Macro Updates

Key takeaway: The TCB Consumer Confidence Index increased slightly in November to 102.0 from a downwardly upwardly revised 99.1 in October. After falling 3 months in row, the confidence index improved a bit and that can be significantly attributed to a lower than expected CPI print and a pull back in yields and mortgage rates. The Present Situation Index, on the other hand, ticked down slightly to 138.2 from 138.6. The Future Expectations Index rose to 77.8 in November from a downwardly revised 72.7 in October. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. It is also important to note that the Expectations Index has pretty much been below 80 since December 2022.

• The Index increased to 102.0 in Nov from 99.1 in Oct. Expectations were 101.0

31st Oct 2023

Key takeaway: The TCB Consumer Confidence Index declined slightly in October to 102.6, down from an upwardly revised 104.3 in September. More importantly, the index has fallen for 3 months in row now. The surge back in inflation, increase in grocery and gas prices at the pump and the uncertain economic outlook are weighing on consumers’ confidence. The Present Situation Index declined to 143.1 from 146.2. The Future Expectations Index fell to 75.6 in October from 76.4 in September. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. It is also important to note that the Expectations Index has pretty much been below 80 since December 2022..

• The Index decreased to 102.6 in Oct from 104.3 in Sep. Expectations were 100.0

26th Sep 2023

Key takeaway: Given the surge back in inflation, increase in gas prices at the pump and the ongoing mess on a possible government shutdown, it is hardly surprising that the TCB Consumer Confidence Index fell in September to 103.0 from 108.7 in August. The Present Situation Index held up at a relatively unchanged level of 147.1. However the Future Expectations Index fell to 73.7 in September from 83.3 in August. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. It is also important to note that the Expectations Index has pretty much been below 80 since December 2022..

• The Index decreased to 103.0 in Sep from 108.7 in Aug. Expectations were 105.5

29th Aug 2023

Key takeaway: The Consumer Confidence Index fell in August to 106.1 from a downwardly revised 114.0 in July. The decrease in the index wipes out the past 2 months gains. Even with the fall though, the Index is still substantially above the low of 96 hit in July last year. The Present Situation Index based on consumers assessment of current business and labor market conditions decreased from 153.0 in July to 144.8 in August. Lastly, the Expectations Index also decreased from 88.0 in July to 80.2 in August. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. So the latest reading sits fractionally above the key level of 80.0. It is also important to note that the Expectations Index had pretty much been below 80 since December 2022.

• The Index decreased to 106.1 in Aug from 114.0 in Jul. Expectations were 116.0

25th Jul 2023

Key takeaway: The Consumer Confidence Index ticked up substantially in July following an equally substantial rise in June. The Index improved from 110.1 in June to 117.0 in July. The Index level is now substantially above the low of 96 hit in July last year. The Present Situation Index based on consumers assessment of current business and labor market conditions increased from 155.3 in Jun to 160.0 in July. Lastly, the Expectations Index also increased from 80.0 in Jun to 88.3 in Jul. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. And the Expectations Index had pretty much been below 80 since December 2022. In this context, it is key to note the substantial jump in the Expectations Index in June and July as sentiment has improved substantially with the resolution of the debt ceiling, stable gas prices, still abundant job openings and falling inflation.

• The Index increased to 117.0 in Jul from 110.2 in Jun. Expectations were 111.8

27th Jun 2023

Key takeaway: The Consumer Confidence Index ticked up substantially in June, from 102.5 in May to 109.7. The Index level is now substantially above the low of 96 hit in July last year. The Present Situation Index based on consumers assessment of current business and labor market conditions increased from 148.9 in May to 155.3 in June. Lastly, the Expectations Index also increased from 71.5 in May to 79.3 in June. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. And the Expectations Index has pretty much been below 80 since December 2022. In this context, it is key to note the substantial jump in the Expectations Index in June. Finally, consumers’ expectations for inflation over the next 12 months also fell to 6.0% in June from 6.1% the month before.

• The Index increased to 109.7 in Jun from 102.5 in May. Expectations were 104.0

30th May 2023

Key takeaway: There wasn’t much of a change in the Consumer Confidence Index numbers for May. The bottomline remains that while consumer sentiment is down from the heady days of 2021-22, it is still far above levels seen in past recession periods. The headline Consumer Confidence Index fell in May to 102.3 from an upwardly revised 103.7 in April. The Present Situation Index based on consumers assessment of current business and labour market conditions decreased from 151.8 in Apr to 148.6 in May. Lastly, the Expectations Index fell to 71.5 in May from 71.7 in Apr. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. And the Expectations Index has pretty much been below 80 since December 2022. While most market participants think that a recession is imminent in the next 12 months, it is also unmistakable that those same participants had been predicting a recession for the past 12 months. The fact remains that we are still dealing with resilient consumption – and that is also being evidenced by first quarter results of companies – especially those in the staples sector! It is worth noting that the Consumer Confidence Index was around the 80 level at the start of the 2008 recession. Finally, consumers’ expectations for inflation over the next 12 months remained similar to previous month, though elevated at 6.1% .

• The Index decreased to 102.3 in May from 103.7 in Apr. Expectations were 99.0

25th Apr 2023

Key takeaway: The headline Consumer Confidence Index fell in April to 101.3 from 104 in March. While the headline index number is lower than 2019 levels, it is still far from a recessionary level and is still indicating a resilient consumer. The Present Situation Index based on consumers assessment of current business and labour market conditions increased a bit from 148.9 in Mar to 151.1 in April. Lastly, the Expectations Index fell to 68.1 in Apr from 74.0 in Mar. A reading below 80 on the Expectations Index has typically been associated with a recession within the next year. While most market participants think that a recession is imminent in the next 12 months, it is also unmistakable that those same participants had been predicting a recession for the past 12 months. The fact remains that we are still dealing with resilient consumption – and that is also being evidenced by first quarter results of companies – especially those in the staples sector! It is worth noting that the Consumer Confidence Index was around the 80 level at the start of the 2008 recession. Finally, consumers’ expectations for inflation over the next 12 months remained similar to previous month, though elevated at 6.2% .

• The Index decreased to 101.3 in Apr from 104.0 in Mar. Expectations were 104.0

28th Mar 2023

Key takeaway: Unlike the January and February reads on consumer confidence, the reading for March showed that consumers assessment of present conditions declined a bit while their assessment of future outlook improved a bit. It is likely that the decline in Present Situation Index might be because of the bank crisis that commenced in early March. Overall consumer confidence though improved from 103.4 in Feb to 104.2 in March. While the headline index number is lower than 2019 levels, it is still far from a recessionary level and is still indicating resilient consumption. Lastly, consumers’ expectations for inflation over the next 12 months remained similar to previous month, though elevated at 6.3% .

• The Index increased to 104.2 in Mar from 103.4 in Feb. Expectations were 101.0

28th Feb 2023

Key takeaway: The February 2023 reading for Consumer Confidence by TCB was an interesting one. Consumers assessment of present conditions improved while their assessment of future outlook worsened. This was the 2nd month of a similar reading. And it makes sense if you look at the larger picture of the US economy. Jobs still remain plentiful, layoffs are still relatively low, payroll numbers are still high. In contrast, many leading economic indicators point to darker clouds on the horizon. The main Consumer Confidence Index declined further from 106.0 in January to 102.9 in February. Lastly, consumers’ expectations for inflation ticked down slightly from 6.7% to 6.3% over the next 12 months.

• The Index decreased to 102.9 in Feb from 106.0 in Jan. Expectations were 108.5

31st Jan 2023

Key takeaway: US Consumer Confidence survey results are often closely linked to gas prices at the pump. So it was not exactly a surprise to see the TCB Confidence Index decrease a bit (at 107.1 from 109.0 in Dec). In contrast, given the decreasing inflation of recent months and current continuing labour market tightness, the Present Situation Index – consumers assessment of current business and labour market conditions – improved from 147.4 in Dec to 150.9 in Jan. Lastly, the Expectations Index – based on consumers short term outlook for income, business and labour market conditions – fell to 77.8 from 83.4 signalling consumers expectations that the current labour market strength might not continue as the economy further weakens. It was also noteworthy that consumers’ expectations for inflation ticked up slightly from 6.6% to 6.8% over the next 12 months.

• The Index decreased to 107.1 in Jan from 109.0 in Dec. Expectations were 109.0

21st Dec 2022

Key takeaway: The Consumer Board Confidence Index increased a substantial 7 points in December! While this can be construed as a good thing, the US consumer literally stands between the Fed and its goal of conquering inflation. Hence, at least in this environment, a large increase in consumer confidence is not something to smile upon. Like I mentioned earlier, the Fed pays close attention to both the TCB Consumer Index and the Michigan survey – especially from an inflation expectations perspective.

• The Index increased to 108.3 in Dec from 101.4 in Nov. Expectations were 101.0

29th Nov 2022

Key takeaway: After 2 out-of-trend upward moved in Aug and Sep, the Consumer Board Confidence index is now back down in Oct and Nov. You need to click on the chart below and look at the index over the past many decades to see how low it had fallen in past recessionary periods. In contrast, while the index is off its last 2 year peak, it is not yet in deep red territory. And still higher than the July low of 95. Make no mistake though – most leading indicators still point to significant headwinds in the economy. Moreover, a “confident consumer” literally stands in the path of the Fed and its target of 2% inflation! Like I mentioned earlier, the Fed pays close attention to both the TCB Consumer Index and the Michigan survey – especially from an inflation expectations perspective. The past month’s NY Fed survey had also shown a slight uptick in medium term inflation expectations. Though market measures of inflation expectations still remain within reasonable bounds.

• The Index decreased to 100.2 from 102.2 in Nov. Expectations were 100.0

25th Oct 2022

After 2 back to back months of increases, the CB Consumer Confidence Index was back down in October. That’s quite expected if considered together with other economic data including softening PMIs, a rise back up in crude oil price and a deteriorating housing market. Yet, the index remains unusually high, in my view, which again highlights a resilient US consumer who continues to buy even in the face of super-charged prices. Once again, I believe, this simply reinforces the Fed’s resolve to keep rates higher and higher for longer. 

• The Index decreased to 102.5 from 107.8 in Oct. Expectations were 106.5

27th Sep 2022

Month after month, the US consumer continues to display amazing resilience. The Consumer Confidence Index was up once again in September – from 103 to 108. Yes, consumer confidence is very closely tied to prices at the pump. Yet, the index holding up fairly well despite the wealth destruction in risk assets and other gloomy data is quite surprising. The good part is that it continues to build hope in the soft landing narrative. (In fact some other data points were very positive as well this week viz. Capital expenditure orders by US firms). But on the flip side, this simply reinforces the Fed’s resolve to keep rate higher and higher for longer. 

• The Index increased to 108.0 from 103.6 in Sep. Expectations were 104.5

30th Aug 2022

After a brief period when markets were starting to believe in a soft landing / goldilocks outcome, we are back to “good news is bad news” days. Results of consumer confidence surveys, both CB and Michigan, are closely tied to gasoline prices. With the drop in prices at the pump, consumer sentiment bounced back in August. Unfortunately though, more signs that the consumer is holding up only strengthens the Fed’s resolve to either take rates much higher and / or keep them lower for longer. This consumer confidence number also coincided with another major release today. Job openings shot up massively – once again highlighting a continuing tight labor market. 

• The Index increased to 103.2 from 95.3 in Aug. Expectations were 97.9

26th Jul 2022

Consumer confidence continues to fall. The latest reading of 95.7 is down from June reading of 98.4 and is the lowest reading since Feb 2021. Similar to the Michigan Consumer Survey, the Fed has its eye on the CB survey as well. How the consumer feels is as important as what the consumer spends in today’s macro world. Watch this WSJ video for a great explanation on the 2 surveys. 

• The Index decreased to 95.7 from 98.4 in June. Expectations were 97.2

28th Jun 2022

You have to click on the link below to see a visual representation of the declining trend in consumer confidence. The headline index declined to 98.7 from 103.2 last month. Even last month’s reading was revised downwards. The headline index number is now the lowest since Feb 2021. The consumer outlook continues to be driven by increasing concerns about inflation and a slowing economy. Similar to the Michigan consumer survey, the key point to note is that the Fed pays very close attention to these survey results!

• The Index decreased to 98.7 from 103.2 in May. Expectations were 100.4

31st May 2022

Similar to last month’s reading – not a significant change. But the fact remains that consumer confidence is at a multi-year low. Consistently high inflation is eroding consumer purchasing power. The PCE data release a few days back also showed consumers dipping into their savings to keep up consumption.

• The Index decreased slightly to 106.4 from 108.6 in April. Expectations were 103.9.

26th Apr 2022

Not a significant change from March. Consumer confidence continues to be relatively weak given the inflation fears and the war backdrop. However, the only positive point in the reading was that it did not get worse!

• The Index decreased slightly to 107.3 from 107.6 in March. Expectations were 108.0.

29th Mar 2022

Taken at face value, the reading is an increase over last month and beat consensus economist expectations. But the reading in isolation does not mean much. A rampant rise in inflation continues to nibble away at future expectations of US consumers. What supports the positive outlook case, is a robust job market which shows no signs of waning. There are 11.3 million job openings in the US. Increasing wages will continue to translate into spending power – till inflation completely erodes it away!

• The Index increased slightly to 107.2 from 105.7 in February. Expectations were 107.

22nd Feb 2022

Consumer Confidence has been trending down over the past several months and that trend continues!

• The Index declined to 110.5 from 111.1 in January. Expectations were 110.