The choppy economic waters in December and January are calming as recent consumer sentiment surveys are showing strong levels of confidence. However, most the current rebound is coming from lower income households and consumers in strong economic states like Florida. Nevertheless, all income groups believe the overall economy will remain strong for the rest of the year.
Internationally, levels of consumer confidence are mixed with Canada as “strong,” Australia as “rising,” compared to “weak” in the U.K. and “pessimistic” in India, Japan and Asia in general, according to CardData.
The University of Michigan Survey of Consumers reports consumer sentiment rose 4.3% in early March, compared to February, but down 3.6% from one-year ago. Consumer view of current economic conditions rose 2.5% in March, compared to the prior month, and down 8.3% from one-year ago. Consumer expectations increased 5.7% in March from February and is up 0.5% from last March.
The University of Michigan notes the early March gain in sentiment was entirely due to households with incomes in the bottom two-thirds of the distribution. Sentiment fell among households with incomes in the top third. The difference for the divergence was how households evaluated their personal finances, as lower income households expressed much more positive assessments. The divergence was due to a monthly jump of one-percentage point in income expectations among middle and lower incomes compared to a change of just one-tenth of a percentage point among those with incomes in the top third.
The University of Florida Consumer Sentiment Index reveals
Floridians’ opinions of their personal financial situation now compared with a year ago increased 1.3 points from 93.8 to 95.1. However, opinions varied greatly by gender and income levels, with male respondents and those with income levels under $50,000 reporting less-favorable opinions. In contrast, overall opinions as to whether this is a good time to buy a major household item like an appliance decreased 1.1 points from 100.2 to 99.1.
Economic indicators in Florida remained positive. In particular, the labor market in Florida continued to add more jobs in December, and the monthly unemployment rate in Florida remained unchanged at 3.3%.
The GfK consumer confidence index in the UK held at -14 in January 2019, its lowest since July 2013 and slightly above market expectations of -15, as concerns about Brexit negotiations persist. Households’ assessment of their personal finances improved due to falling inflation and higher wages and employment, while their outlook on the economy over the next 12 months was the weakest since December 2011 (-39 vs -38).
The weekly ANZ-Roy Morgan Australian Consumer Confidence index notes 29% of Australians says they are “better off” in mid-March, compared to 33% in early mid-February. About 27% of Aussies say they are “worse off over the same period. However, improvements in sentiment toward current economic conditions were not strong enough to offset falls in the future sentiment of economic conditions.
Consumer Confidence in Canada decreased to 54.12 Index Points in February from 54.17 Index Points in January of 2019. Consumer Confidence in Canada averaged 53.44 Index Points from 2010 until 2019, reaching an all time high of 57.05 Index Points in November of 2018 and a record low of 46.80 Index Points in February of 2016.
The Consumer Confidence Index in Japan fell to 41.9 in January 2019 from 42.7 in the previous month and below market expectations of 42.5. This was the lowest reading since November 2016, amid a deterioration in households’ perceptions on employment (down 1.5 points to 44.3), willingness to buy durable goods (down 1.1 points to 41.7), overall livelihood (down 0.5 points to 40.1) and income growth (down 0.3 points to 41.4).
The Reserve Bank of India reports the December 2018 round of its Consumer Confidence Survey (CCS). Consumer confidence turned around in the December 2018 round with the current situation index (CSI) gaining 2.8 points, though still remaining in pessimistic territory.