2016 WAS A GREAT YEAR FOR DIY RETAIL

The holiday season is upon us, and how DIY retail will fare remains to be seen, but 2016 by most accounts has been a great year for DIY retail. The North American Retail Hardware Association (NRHA) is estimating industry growth for 2016 to end at 5.8%. The Home Improvement Research Institute (HIRI) is estimating a little higher, at 6%. The US Census Bureau reports home improvement industry sales through September at 6.7% growth over 2015.

Building materials and home improvement retail sales are 3 to 1 higher than overall retail sales increases for this year.

What has led to the success, and which areas in the DIY space have seen the best results?

Most economists agree that the renewed housing market seen in 2016 will continue into 2017. Add to that higher consumer confidence rates, multi-family housing construction has led to higher sales at home centers and lumber dealers. Remodeling projects and big-ticket purchases are stronger. Big ticket items, such as appliances, have seen the biggest sales uptick in the segment.

Accelerated Analytics DIY customers, using their retailer POS data to analyze sales and inventory, are experiencing the same trends. Across the Accelerated Analytics customer index, June and July showed poor results, followed by an improving August and strong September. 20% of Accelerated Analytics customers’ sales tickets are big ticket items, over $900 per sale. These items were identified as appliances and other expensive items, along with supporting/supplemental products.

The NHRA is predicting 2017 sales to continue this trend and that home improvement product sales should continue to outpace overall retail sales in 2017, anticipating DIY industry growth in the range of 5%.

For more industry stats and observations, download the Accelerated Analytics Retail Industry Briefing Book, which is a monthly publication of key retail industry trends, published to over 7,000 subscribers per month.

Sources: Accelerated Analytics, Hardwareretailing.com

FALL IS HERE…WILL ECONOMIC FACTORS RISE?

Economic indicators for August dropped, but 2016 overall is still growing.

Home Sales: Existing-home sales dropped .9% in August, marking the second month in a row of decline. However, year-over-year sales are up .8% over last year. While new home sales have been steadily rising, existing-home sales make up 90% of the home sale market. The National Association of Retailers reports that with the housing market in 2016 being the strongest sector of the economy over the past two years, the market may be a “victim of its own success”. Sales early this summer reached the highest levels since 2007, which has led to an increase in prices and a shortage of inventory. The average home price is $240,200, up 5.1% from 2015. The NAR feels an increase in home building would solve the issue. A Commerce Department report this week indicated building permits for single-family homes, the largest segment of the housing market, increased in August.

Manufacturing: The Conference Board reported its leading economic index, weighing 10 different economic indicators, dropped .2% in August. The decline in attributed to the average workweek of production workers and the amount of new orders. However, in the six-month period ending in August, the index increased .9% to an annual rate of 1.8%, which is in line with slow growth reported in gross domestic products. It is forecasted to grow at a 3% pace.

Retail Sales: US retail sales were up 1.9% in August, which was down from 2.4% in July. Retail sales had shown strong gains in the spring but has slowed through the summer months. Sales at department stores fell .6% and general merchandise store sales were flat. Building and garden equipment store sales dropped 1.4%. Retail sales are expected to be on the rise, with Halloween sales expected to boom and the 2016 holiday outlook expected to be positive, especially in e-commerce sales.

Sources: Wall St. Journal, Market Watch

US ECONOMY STARTS 2016 SLOW YET STEADY AS CONSUMER SPENDING GOES UP IN JANUARY

Consumer spending grew in January, showing an improvement in retail sales and home purchases. On Friday, the Commerce Department reported personal spending rose 0.5% in January from the prior month. Americans’ pretax earnings from salaries and investments increased at about the same pace. US consumer confidence dropped slightly in January but recovered slightly in February, a sign of slower but steady economic growth.

Reports Friday also revealed that gross domestic product advanced at 1%, higher than the estimate of 0.7%. Inflation still runs below the Federal Reserve’s 2% inflation target.

Improvement in overall economic growth for the quarter ending January 30 was mainly due to the fact that companies pulled back on inventory less than originally expected. Economists have cautioned that first quarter growth may be slow as companies take longer to work through their well-replenished stock.

Source: The Wall St. Journal

US CONSUMER SPENDING INDEX DECREASES IN JUNE

The US Consumer Spending Index decreased by .4 points in June. Confidence in the economy was mixed, as 10.6% of males reported the economy as excellent, versus only 2.9% of females reporting the same. 33.5% of respondents viewed the economy as excellent or good, but 65.2% reporting it fair or poor. When asked about personal finances, 46.8% of those identified as white rated it excellent or good. Those identified as black felt their personal finances were getting better at 37.5% versus 30.2% in May. Republicans in June increased in number who believe the economy is getting better, up 22.7% versus 18.9% in May.

Source: Chain Store Guide           

MAY CONSUMER SENTIMENT INDEX FALLS TO 88.6

Data released Friday indicates consumers are more skeptical about the economy. May sentiment unexpectedly fell to 88.6, down from 95.9 in April and an 11-year high in January of 98.1.  Economists surveyed by the Wall Street Journal projected the May index would stand at 95.5.

"Confidence fell in early May as consumers became increasingly convinced that there would be no quick and robust rebound following the dismal (first) quarter" even if the underperformance was exaggerated by inadequate seasonal adjustments, said Richard Curtin, chief economist at Michigan's Survey of Consumers that compiles the sentiment index.

So far this year, consumers have not rushed to increase spending. Retail sales were flat in April. The one-year inflation expectations are now 2.9%, up from 2.6% in April. Consumers have chosen to save money or pay down debt.

Source: Fox Business.com

Consumer Confidence Below Expectations in April

The Conference Board’s Consumer Confidence Index for April came in at 95.2. Expectations were to see an increase to 102.2 over March’s index of 101.3. March was very high, beating the consensus forecast of 96.4.

Lynn Franco, Director of Economic Indicators at the Conference Board, said in the release: “This month’s retreat was prompted by a softening in current conditions, likely sparked by the recent lackluster performance of the labor market, and apprehension about the short-term outlook."

Before the release, Bank of America Merril Lynch economists noted a weak job report in March and climbing gas prices may create less consumer optimism about the economy. Consumers expecting job growth fell to 13.8% from 15.3% and those expecting fewer jobs rose to 16.3% from 13.6%. Also, 11.2% of consumers are expecting wage cuts, up from 9.7% in March.

Source: Business Insider

US Consumer Sentiment Rises in April

US consumer sentiment, which measures Americans’ assessment of their personal finances, rose higher than expected in April, based on a University of Michigan survey released Friday. Analysts were hoping to see a rating of 94 in April, after a March rating of 93. Preliminary results for April rises the rating to 95.9. The survey did a reading of consumer expectations, and it rose, as well, to 88 from 85.3 in March.  "Although the leading economic index still points to a moderate expansion in economic activity, its slowing growth rate over recent months suggests weaker growth may be ahead," said Ataman Ozyildirim, Economist at The Conference Board, in a statement.

However, this is the second-highest level of consumer confidence in more than eight years. The report “is encouraging given that the March payroll report was a little bit weaker and some of the other data around the consumer has been softer,” said Michelle Meyer, deputy head of U.S economics at Bank of America Corp. in New York. “The fact that consumers are feeling better hopefully will translate into greater expenditures over time and that’s been a missing link to the economic recovery this year.”

Sources: CNBC, MarketWatch, Bloomberg

SLUGGISH US CONSUMER SPENDING START TO 2015

January US consumer spending barely rose .1 percent, despite cheaper gasoline and a buoyant labor market. Economists are speculating that consumers were using their extra income to pay down debt and boost savings. This was below Wall Street’s expectations for a .4 percent increase.

"Should we be worried about the weakness of underlying sales over the past two months? Possibly," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

"But all the conditions are in place for a period of very strong consumption growth. We still expect to see that strength come through in the retail sales data soon."

The economy has added more than a million jobs in the past three months and the number of those seeking jobs hit its lowest level since 2007 in December.

Resource: Reuters

Consumer Spending Keeps Leading The U.S. Economy In Fourth Quarter

January 30, 2015

The U.S. Bureau of Economic Analysis today reported 2.6 percent annualized growth in real Gross Domestic Product for the fourth quarter of 2014, which is a little below consensus, but closer to the long-term trend growth rate of the economy.  The long-term trend is about 2.0 percent.

The resiliency of consumer spending shouldn't be surprising as it is fundamentally supported by strong job growth, falling oil prices and relatively optimistic consumers, as suggested by The Conference Board Consumer Confidence Index released earlier this week.  The fundamental factors supporting spending are the strongest they've been in this expansion.

Investment in equipment dropped by 1.9 percent, mostly due to weakness in investment in industrial and transportation equipment, which is probably related to investment cuts in the energy sector.

The current pace of economic growth is likely to sustain strong job growth in the coming months and further reduce the unemployment rate.  The Employment Cost Index, released today as well, showed ongoing acceleration in wage growth, with wages in the private sector moving up to 2.3 percent year on year.  Further acceleration is to be expected.  The acceleration in wage growth increases the likelihood of an increase in the Fed interest rate by mid-2015.

Despite the current strength in economic activity, the downward pressure on profits, the strong dollar, and the weakening global economy are likely to partly offset the strength in consumer spending.  We do not see further acceleration in GDP growth as a likely scenario.  Moving forward, we expect the U.S. economy to grow at about a 2.5 percent rate in the coming quarters.

Source: The Conference Board

The Conference Board Consumer Confidence Index Increased Sharply

January 27, 2015

The Conference Board Consumer Confidence Index, which had increased in December, rose sharply in January.  The Index now stands at 102.9, up from 93.1 in December.  The Present Situation Index rose to 112.6 from 99.9, while the Expectations Index increased to 96.4 from 88.5 in December.

Lynn Franco, Director of Economic Indicators at The Conference Board, said: "Consumer confidence rose sharply in January, and is now at its highest level since August 2007 (Index 105.6).  A more positive assessment of current business and labor market conditions contributed to the improvement in consumers' view of the present situation.  Consumers also expressed a considerably higher degree of optimism regarding the short-term outlook for the economy and labor market, as well as their earnings."

Consumers' assessment of present-day conditions was considerably more favorable in January than in December.  Those saying business conditions are "good" increased from 24.7 percent to 28.1 percent, while those claiming business conditions are "bad" decreased from 18.9 percent to 16.8 percent.  Consumers were also much more positive in their assessment of the job market.  Those stating Jobs are "plentiful" increased from 17.2 percent to 20.5 percent.  Those claiming jobs are "hard to get" decreased from 27.3 percent to 25.7 percent.

Consumers' optimism about the short-term outlook improved in January.  The percentage of consumers expecting business conditions to improve over the next six months rose from 17.8 percent to 18.4 percent, while those expecting business conditions to worsen declined from 9.9 percent to 7.7 percent.

Consumers' outlook for the labor market was also more optimistic.  Those anticipating more jobs in the months ahead increased from 14.6 percent to 16.7 percent, while those anticipating fewer jobs declined from 16.5 percent to 15.0 percent.  The proportion of consumers expecting growth in their incomes improved from 16.2 percent to 20.0 percent.  However, the proportion expecting a decrease increased marginally, from 10.2 percent to 11.3 percent.

Source: The Conference Board

The Conference Board Consumer Confidence Index Bounces Back

December 30, 2014

The Conference Board Consumer Confidence Index, which had declined in November, improved in December.  The Index now stands at 92.6, up from 91.0 in November.  The Present Situation Index rose to 98.6 from 93.7, while the Expectations Index decreased to 88.5 from 89.3 in November.

Says Lynn Franco, Director of Economic Indicators at The Conference Board, "Consumer confidence rebounded modestly in December, propelled by a considerably more favorable assessment of current economic and labor market conditions.  As a result, the Present Situation Index is now at its highest level since February 2008.  Consumers were moderately less optimistic about the short-term outlook in December, but even so, they are more confident at year-end than they were at the beginning of the year."

Consumers' appraisal of current conditions was considerably more favorable in December.  Those saying business conditions are "good" was unchanged at 24.8 percent, while those claiming business conditions are "bad" decreased from 21.8 percent to 19.6 percent.  Consumers were also more positive in their assessment of the job market, with the proportion stating jobs are "plentiful" increasing from 16.2 percent to 17.1 percent, and those claiming jobs are "hard to get" decreasing from 28.7 percent to 27.7 percent.

Consumers' optimism about the short-term outlook eased moderately in December.  The percentage of consumers expecting business conditions to improve over the next six months edged down from 18.3 percent to 18.0 percent, but those expecting business conditions to worsen declined slightly from 10.4 percent to 10.1 percent.  Consumers' outlook for the labor market was marginally less optimistic.  Those anticipating fewer jobs rose from 16.1 percent to 16.9 percent.  The proportion of consumers expecting growth in their incomes declined moderately from 16.9 percent to 16.4 percent; however the proportion expecting a decrease also declined, from 11.0 percent to 10.0 percent.

Source: The Conference Board

The Conference Board Consumer Confidence Index Declines

November 25, 2014

The Conference Board Consumer Confidence Index, which had rebounded in October, declined in November.  The index now stands at 88.7, down from 94.1 in October.  The Present Situation Index declined from 94.4 to 91.3, while the Expectations Index decreased sharply to 87.0 from 93.8 in October.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence retreated in November, primarily due to reduced optimism in the short-term outlook.  Consumers were somewhat less positive about current conditions and the present state of the job market; moreover, their optimism in the short-term outlook in both areas has waned.  However, income expectations were virtually unchanged and gas prices remain low, which should help boost holiday sales."

Consumers' assessment of present-day conditions was moderately less favorable in November than in October.  The proportion saying business conditions are "good" decreased from 24.7 percent to 24.0 percent, while those claiming business conditions are "bad" increased from 21.3 percent to 22.4 percent.  Consumers' assessment of the job market was slightly less favorable, with the proportion stating jobs are "plentiful" falling from 16.5 percent to 16.0 percent, and those claiming jobs are "hard to get" increasing marginally from 29.0 percent to 29.2 percent.

Consumers' optimism, which had improved in October, retreated in November.  The percentage of consumers expecting business conditions to improve over the next six months decreased from 19.4 percent to 17.6 percent, while those expecting business conditions to worsen rose from 8.9 percent to 10.7 percent.  Consumers' outlook for the labor market was also less optimistic.  Those anticipating more jobs in the months ahead decreased from 16.0 percent to 15.0 percent, while those anticipating fewer jobs rose from 14.1 percent to 16.4 percent.  The proportion of consumers expecting growth in their incomes edged down from 16.7 percent to 16.3 percent, while the proportion expecting a drop in income was virtually unchanged at 11.4 percent compared to 11.3 percent in October.

Source: The Conference Board 

The Conference Board Consumer Confidence Index Rebounds

October 28, 2014

The Conference Board Consumer Confidence Index, which had decreased in September, rebounded in October.  The Index now stands at 94.5, up from 89.0 in September.  The Present Situation Index edged up from 93.0 to 93.7, while the Expectations Index increased sharply to 95.0 from 86.4 in September.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence, which had declined in September, rebounded in October.  A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers' view of the present situation.  Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market, and are more optimistic about their future earnings potential.  With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers."

Consumers' appraisal of current conditions was moderately more favorable in October than in September.  Their view of business conditions was mixed; while the proportion saying conditions are "good" inched up from 24.2 percent to 24.5 percent, those claiming business conditions are "bad" also increased slightly, from 21.2 percent to 21.7 percent.  Consumers' assessment of the job market improved moderately, with the proportion stating jobs are "plentiful" increasing marginally from 16.3 percent to 16.5 percent, and those claiming jobs are "hard to get" declining slightly from 29.4 percent to 29.1 percent.

Consumers' optimism, which had declined considerably in September, improved in October.  The percentage of consumers expecting business conditions to improve over the next six months increased from 19.0 percent to 19.6 percent, while those anticipating fewer jobs fell from 16.9 percent to 13.9 percent.  The proportion of consumers expecting growth in their incomes rose from 16.9 percent in September to 17.7 percent in October, while the proportion expecting a drop in income fell from 13.4 percent to 11.6 percent.

Source: The Conference Board

The Conference Board Consumer Confidence Index Declines

September 30, 2014

The Conference Board Consumer Confidence Index, which had increased in August, declined in September.  The Index now stands at 86.0, down from 93.4 in August.  The Present Situation Index decreased to 89.4 from 93.9, while the Expectations Index dropped to 83.7 from 93.1 in August.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence retreated in September after four consecutive months of improvement.  A less positive assessment of the current job market, most likely due to the recent softening in growth, was the sole reason for the decline in consumers' assessment of present-day conditions.  Looking ahead, consumers were less confident about the short-term outlook for the economy and labor market, and somewhat mixed regarding their future earnings potential.  All told, consumers expect economic growth to ease in the months ahead."

Consumers assessed current conditions less favorably in September compared to a month ago.  Their view of business conditions was virtually unchanged: those saying conditions are "good" fell minutely, from 23.5 to 23.4 percent, while those claiming business conditions are "bad" held constant at 21.3 percent.  Consumers' appraisal of the job market declined more appreciably, with the proportion stating jobs are "plentiful" falling from 17.6 percent to 15.1 percent.  Those claiming jobs are "hard to get" was barely changed, at 30.1 percent versus 30.0 percent in August.

Consumers' optimism about the short-term outlook declined considerably in September.  The percentage of consumers expecting business conditions to improve over the next six months fell from 20.8 percent to 18.6 percent, while those expecting business conditions to worsen rose from 9.9 percent to 12.0 percent.  Consumers' outlook for the labor market likewise took a downturn.  Those anticipating more jobs in the months ahead fell from 17.8 percent to 15.2 percent, while those anticipating fewer jobs rose from 15.2 percent to 17.8 percent.  The proportion of consumers expecting growth in their incomes rose in September to 16.8 percent, compared to 15.5 percent in August.  However, the proportion expecting a drop in income also rose - to 13.4 percent versus 11.6 percent a month ago.

Source: The Conference Board

The Conference Board Consumer Confidence Index Improves Again

August 26, 2014

The Conference Board Consumer Confidence Index, which had increased in July, improved further in August.  The Index now stands at 92.4, up from 90.3 in July.  The Present Situation Index increased to 94.6 from 87.9, while the Expectations Index edged down to 90.9 from 91.9 in July.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers' spirits.  Looking ahead, comsumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings.  Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market."

Consumers' appraisal of current conditions continued to improve through August.  Those saying business conditions are "good" edged up to 23.9 percent from 23.3 percent, while those claiming business conditions are "bad" declined to 21.5 percent from 22.8 percent.  Consumers' assessment of the job market was also more positive.  Those stating jobs are "plentiful" increased to 18.2 percent from 15.6 percent, while those claiming jobs are "hard to get" declined marginally to 30.6 percent from 30.9 percent.

Consumers were slightly less optimistic in August about the short-term outlook.  The percentage of consumers expecting business conditions to improve over the next six months held steady at 20.4 percent, while those expecting business conditions to worsen fell to 10.2 percent from 12.1 percent.  Consumers, however, were somewhat mixed about the outlook for the labor market.  Those anticipating more jobs in the months ahead fell to 17.0 percent from 18.7 percent, although those anticipating fewer jobs also declined to 15.8 percent from 16.6 percent.  Fewer consumers expect their incomes to grow, 15.5 percent in August versus 17.7 percent in July, while those expecting a drop in their incomes rose marginally to 11.9 percent from 11.1 percent.

Source: The Conference Board

The Conference Board Consumer Confidence Index Improves Again

July 29, 2014

The Conference Board Consumer Confidence Index, which had improved in June, increased in July.  The Index now stands at 90.9, up from 86.4 in June.  The Present Situation Index increased to 88.3 from 86.3, while the Expectations Index rose to 92.7 from 86.4 in June.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence increased for the third consecutive month and is now at its highest level since October 2007 (95.2).  Strong job growth helped boost consumers' assessment of current conditions, while brighter short-term outlooks for the economy and jobs, and to a lesser extent personal income, drove the gain in expectations.  Recent improvements in consumer confidence, in particular expectations, suggests the recent strengthening in growth is likely to continue into the second half of this year."

Consumers' assessment of current conditions improved in July.  Those claiming business conditions are "good" edged down to 22.7 percent from 23.4 percent, while those stating business conditions are "bad" was virtually unchanged at 22.7 percent.  Consumers' appraisal of the job market was more favorable.  Those saying jobs are "plentiful" increased to 15.9 percent from 14.6 percent, while those claiming jobs are "hard to get" remained unchanged at 30.7 percent.

Consumers' expectations were more optimistic in July.  The percentage of consumers expecting business conditions to improve over the next six months increased to 20.2 percent from 18.4 percent, while those expecting business conditions to worsen held steady at 11.5 percent.  Consumers were more positive about the outlook for the labor market.  Those anticipating more jobs in the months ahead increased to 19.1 percent from 16.3 percent, while those anticipating fewer jobs declined to 16.4 percent from 18.4 percent.  Slightly more consumers expect their incomes to grow, 17.3 percent in July versus 16.7 percent in June, while those expecting a drop in their incomes declined to 11.0 percent from 11.4 percent.

Source: The Conference Board

Spending Growth Solid In June

July 14, 2014

Solid June spending growth was reported for May 31, 2014 through June 30, 2014, compared to June 1, 2013 through July 1, 2013.

A slowly improving economy and growing job market have helped drive consumer spending.  Spending growth in June slowed slightly from May but remained positive on a year-over-year basis with a growth of 3%.

While spending in travel and hotel slowed from the previous month, growth was still strong in these sectors, with a year-over-year increase of 4.9% and 7.1%, respectively.  Food and beverage stores spending was up 4.7% versus May's 4.2% growth, a trend reflecting an increase in food costs.

Retail spending growth retreated slightly in June compared to May but remained positive with 1.2% growth.  5.7% growth in building and gardening materials and 1.5% growth in furniture and home furnishings reflect continued improvement in the housing market.  However, a slowly declining unemployment rate caused consumers to remain hesitant and kept overall retail spending growth moderate.

Average ticket growth also decreased slightly from May but remained positive at 0.9% growth on a year-over-year basis, reflecting increased food and gas prices.  Food and drinking places and food and beverage stores saw a growth of 2.5% and 1.5% respectively, as rising food costs impacted the average ticket in these categories for consumers.

Finally, credit spending continued to be the preferred spending method this month with a 5.3% increase in transaction growth and a 3.9% dollar volume growth.  The increase in transaction volume was supported by year-over-year growth in categories such as hotel and travel, where consumers tend to utilize this payment method most.

Source: Retailing Today

The Conference Board Consumer Confidence Index Continues To Improve

June 24, 2014

Index at Highest Level Since January 2008

The Conference Board Consumer Confidence Index, which had increased in May, improved again in June.  The Index now stands at 85.2, up from 82.2 in May.  The Present Situation Index increased to 85.1 from 80.3, while the Expectations Index rose to 85.2 from 83.5 in May.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence continues to advance and the index is now at its highest level since January 2008 (87.3).  June's increase was driven primarily by improving current conditions, particularly consumers' assessment of business conditions.  Expectations regarding the short-term outlook for the economy and jobs were moderately more favorable, while income expectations were a bit mixed.  Still, the momentum going forward remains quite positive."

Consumers' appraisal of current conditions improved in June.  Those claiming business conditions are "good" increased to 23.0 percent from 21.1 percent, while those stating business conditions are "bad" decreased to 22.8 percent from 24.6 percent.  Consumers' assessment of the job market was also more favorable.  Those stating jobs are "plentiful" edged up to 14.7 percent from 14.2 percent, while those claiming jobs are "hard to get" declined to 31.8 percent from 32.2 percent.

Consumers' expectations were generally more positive in June.  The percentage of consumers expecting business conditions to improve over the next six months increased to 18.8 percent from 17.7 percent.  However, those expecting business conditions to worsen increased to 11.4 percent from 10.7 percent.

Consumers were more positive about the outlook for the labor market.  Those anticipating more jobs in the months ahead increased to 16.3 percent from 15.2 percent, while those anticipating fewer jobs edged down to 18.7 percent from 18.9 percent.  Fewer consumers expect their incomes to grow, 15.9 percent versus 18.0 percent, but those expecting a drop in their incomes also declined, to 12.1 percent from 14.5 percent.

Source: The Conference Board

Consumers Spending Outlook Brightens In May

June 11, 2014

Consumer spending in May increased 4.2%, with the retail sector enjoying new vigor.  The spending increase of 4.2% compared to 4.1% in April.

Retail spending growth of 1.7% marked a slight uptick compared to April's growth of 1.3% as warmer weather across most regions, with the exception of the Northeast, supported retail foot traffic.  Although the 1.7% increase lagged the total spending figure, May marked the strongest growth in seven months, primarily driven by spending at building material and supply dealers (6.7% in May vs. 3.6% in April) and furniture and home furnishings merchants (1.4% in May vs. -0.7% in April).  Average ticket growth of 1.2% in May gained steam against April's 0.5% growth, driven by higher year-over-year gas prices, higher food prices and an increase in some leisure-related categories.

A number of factors, including normalized weather, pent-up demand, falling unemployment and rising home prices supported consumers' willingness to spend in May.  Credit card spending growth continued to be strong and led all other payment types.  The surge in spending growth at hotel and travel merchants, building material and home furnishing merchants, where credit is the primary payment tool, was a major driver supported by easing lending standards and payroll growth.

Other areas of growth included hotel spending growth of 9.3%, a 12 month high, compared to April's 7%.  Gas station spending growth of 3.6% was higher compared to April's growth of 3.3% and was another key supporting factor in overall growth as gas prices remained elevated versus last year.

Source: Retailing Today

The Conference Board Consumer Confidence Index Improves In May

May 27, 2014

The Conference Board Consumer Confidence Index, which had decreased in April, improved moderately in May.  The Index now stands at 83.0, up from 81.7 in April.  The Present Situation Index increased to 80.4 from 78.5, while the Expectations Index edged up to 84.8 from 83.9 in April.

Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence improved slightly in May, as consumers assessed current conditions, in particular the labor market, more favorably.  Expectations regarding the short-term outlook for the economy, jobs, and personal finances were also more upbeat.  In fact, the percentage of consumers expecting their incomes to grow over the next six months is the highest since December 2007 (20.2 percent).  Thus, despite last month's decline, consumers' confidence appears to be growing."

Consumers' assessment of present-day conditions improved in May.  Those stating business conditions are "good" decreased to 21.1 percent from 22.2 percent, while those stating business conditions are "bad" declined to 24.1 percent from 24.8 percent.  Consumers' assessment of the labor market was more favorable.  Those claiming jobs are "plentiful" rose to 14.1 percent from 13.0 percent, while those claiming jobs are "hard to get" decreased slightly to 32.3 precent from 32.8 percent.

Consumers' expectations increased slightly in May.  The percentage of consumers expecting business conditions to improve over the next six months edged up to 17.5 percent from 17.2 percent, while those expecting business conditions to worsen decreased marginally to 10.2 percent from 10.5 percent.

Consumers were more positive about the outlook for the labor market.  Those anticipating more jobs in the months ahead increased to 15.4 percent from 14.7 percent, while those anticipating fewer jobs edged up to 18.3 percent from 18.0 percent.  The proportion of consumers expecting their incomes to grow increased to 18.3 percent from 16.8 percent, but those expecting a drop in their incomes also increased, to 14.5 percent from 12.9 percent.

Source: The Conference Board