Consumer Sentiment: Preliminary Results for February 2025

The University of Michigan's Index of Consumer Sentiment (ICS) - Preliminary Results for February 2025 was released today:

Predicted: 70.0

• Actual: 67.8

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• Change from Previous Month: -4.64% (-3.3 points)
  
  

• Change from 12 Months Previous: -11.83% (-9.1 points)

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• Final ICS Reading for January 2025: 71.1
  
  
• Final ICS Reading for February 2024: 76.9

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From Today's Report:

"...Consumer sentiment fell for the second straight month, dropping about 5% to reach its lowest reading since July 2024. The decrease was pervasive, with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups. Furthermore, all five index components deteriorated this month, led by a 12% slide in buying conditions for durables, in part due to a perception that it may be too late to avoid the negative impact of tariff policy. Expectations for personal finances sank about 6% from last month, again seen across all political affiliations, reaching its lowest value since October 2023. Many consumers appear worried that high inflation will return within the next year. Interviews for this release concluded on February 4.

Year-ahead inflation expectations jumped up from 3.3% last month to 4.3% this month, the highest reading since November 2023 and marking two consecutive months of unusually large increases. This is only the fifth time in 14 years we have seen such a large one-month rise (one percentage point or more) in year-ahead inflation expectations. The current reading is now well above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations ticked up from 3.2% last month to 3.3% this month. Long-run inflation expectations remain elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic..."

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Consumer Sentiment: Inflation Expectations
Surge Following Tariff Developments
February, 2025 UPDATE

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The ICS is derived from the following five survey questions:

1. "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"
   
   
2. "Now looking ahead, do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"
   
   
3. "Now turning to business conditions in the country as a whole, do you think that during the next twelve months we'll have good times financially, or bad times, or what?"
   
   
4. "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"
   
   
5. "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"
   

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• Click here for more on how the ICS is calculated.

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The ICS uses a 1966 baseline, i.e. for 1966, the ICS = 100. So any number that is below the 1966 baseline of 100 means that the folks who were polled recently aren't as optimistic about the U.S. economy as those polled back in 1966.

The ICS is similar to the Consumer Confidence Index in that they both measure consumer attitudes and offer valuable insight into consumer spending.

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The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

=========

• Click here to view the full University of Michigan report.

========= 

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Gross Domestic Product (GDP): First Estimate for Q4, 2024

Earlier this morning, the Commerce Department's Bureau of Economic Analysis (BEA) released its first estimate for U.S. Real Gross Domestic Product (GDP) for the fourth quarter of 2024:

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Previous quarter: +3.1%

• Actual: +2.3%

The yellow-highlighted percentage represents the first estimate of the quarter-to-quarter change for Real Gross Domestic Product for the entire United States.

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The GDP is a very broad measure of economic activity for the entire United States, covering all sectors of the economy. The Commerce Department defines real GDP as, "the output of goods and services produced by labor and property located in the United States."

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CHART: GDP - Quarter-to-Quarter Change
Q4, 2024 - First Estimate / UPDATE

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• Click here to view the full Commerce Department report (PDF).
  
  

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Consumer Sentiment: Final Results for December 2024

The University of Michigan's Index of Consumer Sentiment (ICS) - Final Results for December 2024 was released today:

Predicted: 75.0

• Actual: 74.0

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• Change from Previous Month: +3.06% (+2.2 points)
  
  

• Change from 12 Months Previous: +6.17% (+4.3 points)

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• Final ICS Reading for November 2024: 71.8
  
  
• Final ICS Reading for December 2023: 69.7

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From Today's Report:

"...Consumer sentiment confirmed its early-month reading, rising for the fifth consecutive month and reaching its highest value since April 2024. Buying conditions exhibited a particularly strong 32% improvement, primarily due to a surge in consumers expecting future price increases for large purchases. The expectations index continued the post-election re-calibration that began last month, climbing for Republicans and declining for Democrats in December. Importantly, for Independents, expectations were essentially unchanged from the past month or so for personal finances, short-run business conditions, and long-run business conditions. Broadly speaking, consumers believe that the economy has improved considerably as inflation has slowed, but they do not feel that they are thriving; sentiment is currently about midway between the all-time low reached in June 2022 and pre-pandemic readings.

Year-ahead inflation expectations rose from 2.6% last month to 2.8% this month, the first month-over-month increase since May, but within the 2.3-3.0% range seen in the two years pre-pandemic. Long-run inflation expectations edged down from 3.2% last month to 3.0% this month, modestly elevated relative to the range of readings seen in the two years pre-pandemic..."

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CHART: Consumer Sentiment - Surge In Concerns
that Prices of Major Purchases Will Rise

 

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The ICS is derived from the following five survey questions:

1. "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"
   
   
2. "Now looking ahead, do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"
   
   
3. "Now turning to business conditions in the country as a whole, do you think that during the next twelve months we'll have good times financially, or bad times, or what?"
   
   
4. "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"
   
   
5. "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"
   

=========

• Click here for more on how the ICS is calculated.

=========

The ICS uses a 1966 baseline, i.e. for 1966, the ICS = 100. So any number that is below the 1966 baseline of 100 means that the folks who were polled recently aren't as optimistic about the U.S. economy as those polled back in 1966.

The ICS is similar to the Consumer Confidence Index in that they both measure consumer attitudes and offer valuable insight into consumer spending.

=========

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

=========

• Click here to view the full University of Michigan report.

=========

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Gross Domestic Product (GDP): Final Estimate for Q3, 2024

Earlier this morning, the Commerce Department's Bureau of Economic Analysis (BEA) released its final estimate for U.S. Real Gross Domestic Product (GDP) for the third quarter of 2024:

============

Previous quarter: +3.0%

• Actual: +3.1%

The yellow-highlighted percentage represents the first estimate of the quarter-to-quarter change for Real Gross Domestic Product for the entire United States.

============

The GDP is a very broad measure of economic activity for the entire United States, covering all sectors of the economy. The Commerce Department defines real GDP as, "the output of goods and services produced by labor and property located in the United States."

============

 

CHART: GDP - Quarter-to-Quarter Change
Q3, 2024 - Final Estimate / UPDATE

 

============

• Click here to view the full Commerce Department report (PDF).
  
  

============

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Consumer Confidence Index (CCI) for October 2024

Consumer Confidence Index® (CCI) for this month (October, 2024) was released by The Conference Board® this morning:

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Predicted: 99.0

• Actual: 108.7

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Previous Month (revised): 99.2

• Change from Previous Month: +9.58% (+9.5 points)
  

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The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

From Today's Report:

"...Confidence Rebounded in October as Consumers Regained Faith in the US Economy
'Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years,' said Dana M. Peterson, Chief Economist at The Conference Board®. 'In October’s reading, all five components of the Index improved. Consumers’ assessments of current business conditions turned positive. Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data. Compared to last month, consumers were substantially more optimistic about future business conditions and remained positive about future income. Also, for the first time since July 2023, they showed some cautious optimism about future job availability.

'October’s increase in confidence was broad-based across all age groups and most income groups. In terms of age, confidence rose sharpest for consumers aged 35 to 54. On a six-month moving average basis, householders aged under 35 and those earning over $100K remained the most confident.'

Peterson added: 'The proportion of consumers anticipating a recession over the next 12 months dropped to its lowest level since the question was first asked in July 2022, as did the percentage of consumers believing the economy was already in recession. Consumers’ assessments of their Family’s Current Financial Situation were unchanged, but optimism for the next six months reached a series high. (These measures are not included in calculating the Consumer Confidence Index®).'..."

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Every month, The Conference Board sends a questionnaire to 5,000 U.S. households. Survey participants are polled about their feelings regarding the U.S. economy, current and future, and about their own fiscal circumstances. On average, 3,500 participants complete and return the 5-question survey.

• The baseline "100" score for the CCI is associated with 1985 survey data.

When consumers feel good about the economy, they tend to do more spending, and vice versa.

Based in New York City, The Conference Board is a private, not-for-profit organization with a mission to, "create and disseminate knowledge about management and the marketplace to help businesses strengthen their performance and better serve society."

The CCI is usually released on the last Tuesday of the month.

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CHART: Consumer Confidence Index (CCI)
OCTOBER 2024 Update

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• Click here to view the full Conference Board report.

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Consumer Confidence Index (CCI) for August 2024

Consumer Confidence Index® (CCI) for this month (August, 2024) was released by The Conference Board® this morning:

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Predicted: 100.0

• Actual: 103.3

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Previous Month (revised): 101.9

• Change from Previous Month: +1.37% (+1.4 points)
  

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The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

From Today's Report:

"...'Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,' said Dana M. Peterson, Chief Economist at The Conference Board®. 'Consumers continued to express mixed feelings in August. Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market. Consumers’ assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic. This likely reflects the recent increase in unemployment. Consumers were also a bit less positive about future income.'

Peterson added: 'Consumers were likely rattled by the financial market turmoil in early August, as they were less upbeat about the stock market. In August, 46.9% of consumers expected stock prices to increase over the year ahead (down from 50.6% in July), while 27.2% expected a decrease (up from 23.1%). August’s write-in responses also included more mentions of stock prices and unemployment as affecting consumer’s views of the US economy. However, consumers did not change their views about a possible recession: the proportion of consumers predicting a recession was stable and well below the 2023 peak.'..."

================

Every month, The Conference Board sends a questionnaire to 5,000 U.S. households. Survey participants are polled about their feelings regarding the U.S. economy, current and future, and about their own fiscal circumstances. On average, 3,500 participants complete and return the 5-question survey.

• The baseline "100" score for the CCI is associated with 1985 survey data.

When consumers feel good about the economy, they tend to do more spending, and vice versa.

Based in New York City, The Conference Board is a private, not-for-profit organization with a mission to, "create and disseminate knowledge about management and the marketplace to help businesses strengthen their performance and better serve society."

The CCI is usually released on the last Tuesday of the month.

================   

CHART: Consumer Confidence Index (CCI)
AUGUST 2024 Update

========================================

• Click here to view the full Conference Board report.

=========================================

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Durable Goods Orders During July 2024

The Durable Goods Orders report for July 2024 was released by the Commerce Department this morning:

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Predicted: +5.0%

• Actual: $289,645,000,000 (+$26,074,000,000 [+9.89%])

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CHART: Durable Goods Orders
JULY 2024 UPDATE

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The yellow-highlighted figures represent the dollar amount of new orders for durable or hard goods for immediate or future delivery from U.S. manufacturers, along with both the dollar and month-to-month percentage change.

Examples of durable goods: cars, airplanes, computers, furniture -- items that are built to last at least three years.

================

• Click here to view the full Commerce Department report (PDF).
  

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