Will the Real Confidence Measure Please Stand Up?

Summary The Conference Board’s measure of consumer confidence rose slightly in July, remaining at its highest level of the post-pandemic era. The gain was largely unexpected especially in the wake of the sharp decline in an alternative measure of consumer sentiment earlier this month. Although the conflicting purchase measures mean that the jury is still out on how inflation is weighing on consumers, optimism around business conditions, employment and expected income shows that consumers remain upbeat. More Color on Inflation: How Prices Are Impacting Plans to Buy In defiance of widespread expectations that inflation and a resurgence in COVID cases would weigh on sentiment, the Conference Board’s measure of consumer confidence rose in July to its highest level of the post-pandemic era. This is at odds with a decline in a previously reported counterpart measure from the University of Michigan which showed inflation fears pulling the measure lower. Mark Twain once famously quipped that news of his death had been greatly exaggerated. Today’s report that consumer confidence rose in July does not mean that inflation worries have gone away though. Inflation is still top of mind for consumer, although notably the forward-looking inflation measure came off the boil, if only slightly, with consumers expecting 6.6% inflation over the next 12 months in July versus 6.7% in June. Until recently we have been of a mind that after a year or more of putting their life on hold, most consumers were price-takers. READ FULL ARTICLE>>