Consumer sentiment remains buoyant as the holiday shopping season heads into its final two weeks. The Morning Consult index of consumer sentiment rose again last week for its eighth consecutive week-over-week gain. The index score of 112.0 is less than one point below its 52-week high of 112.6 posted in the last week of April.
The index is based on the firm’s daily survey of some 7,500 U.S. adults and is higher than it was at this time last year. The 52-week low of 104.5 was posted on January 21.
The gap between the index’s component scores widened slightly in the week ending December 8, with the future expectations score rising by 0.6 points to 112.6 and the current conditions score dipping by 0.4 points to 111.2.
According to Morning Consult, positive news on international trade and a better-than-expected November jobs report overcame a poor report on manufacturing.
The firm went on:
The FOMC meets early this week to vote on monetary policy before the December 15 deadline for a phase one U.S.-China trade deal. Increased tariffs will not affect prices in time for the holidays and, therefore, will likely not directly affect holiday shopping. However, if the trade deal doesn’t materialize and equity markets panic, consumers may lose confidence.
Morning Consult asks the same questions of its survey respondents as does the University of Michigan’s twice-monthly Survey of Consumers. The difference is in the number and method of the survey. The Michigan sentiment index is based on 600 telephone interviews with U.S. adults while Morning Consult’s results are based on an ongoing survey comprising 7,500 daily interviews and 210,000 monthly interviews, all conducted online.
The survey breaks down the data it collects by some key demographic groups. Here are some of the results of that breakdown.
Households with income of less than $50,000 annually posted an overall sentiment score of 106.7 last week, up 0.5 points from the previous week. Among households with income between $100,000 and $150,000, the overall score rose by 1.5 points and overall sentiment among households with incomes above $250,000 added 1.2 index points to post a score of 130.6.
Among African Americans, overall sentiment rose by 1.9 points to 111.3, while falling by 1.6 points to 113.1 among Hispanics.
By industry sector, leisure and hospitality industry employees posted the largest week over week gain, up 9.2 points to 119.3. Sentiment among retail trade workers rose by 2.9 points to 118.5, while sentiment fell by 6.6 points in the real estate industry and 4.9 points in the transportation industry.
Top executives posted a one-point dip in overall sentiment for a score of 121.6. Sentiment among production, operations or logistics businesses also dipped by a point last week to 118.6.
Looking at responses to questions about current economic conditions, Americans employed in the real estate and transportation industries were considerably less optimistic, with drops of 7.5 and 7.0 index points, respectively. This time of year is a traditionally slow period for home buyers and sellers, and the trucking business continues to experience serious weakness. Earlier this week another trucking firm declared bankruptcy, leaving drivers stranded and some with no way to get home.
Manufacturing workers remain wary of the current economy, dropping their index score by 0.5 points to 121.0, while agriculture workers raised their score by six points to 125.1.
Company executives are also slightly more downbeat about current conditions, lowering their index score by 0.9 points to 129.9, but still within a couple of points of the 12-month high.
When asked about 12-month expectations for their personal finances, Americans between the ages of 18 and 24 added 3.4 points to bring their index score to 142.0, just below that of the 25 to 34-year-olds who posted a score of 145.9. Millennials, it seems, are far more optimistic than boomers, who posted an index score of 107.1.
Wednesday’s report on the consumer price index (CPI) showed a modest gain in November, with prices rising by 0.3% month over month on a seasonally adjusted basis. The CPI rose 2.1% in November, and the core index (less food and fuel) rose 2.3%. The Federal Reserve’s open market committee is expected to leave interest rates as they are later today. The Fed uses a different metric, personal consumption expenditures, to measure inflation. In October, inflation by that metric rose by just 1.3%.
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