As noted earlier, Consumer Confidence for the month of May came in at 128, which was right inline with consensus economist expectations. May was the 11th straight month that Consumer Confidence has been above 120. Since 1967, there have only been two other periods where US consumers have been this positive for such an extended streak.
The first chart below shows Consumer Confidence since 1967, while the second chart shows streaks of consecutive months above 120. The two other periods where confidence was this high came in the late 1960s and the late 1990s.
Confidence was above 120 for 35 months from February 1967 (the first month of data for the survey) through December 1969. It then dipped below 120 in 1970 and didn’t get back above it again for the next 18 years until May 1988.
Unsurprisingly, the next period of continued strength for Consumer Confidence came during the Dot Com boom of the late 90s. In May 1997, confidence ticked above 120 and stayed above it for 17 straight months. After one month of a sub-120 reading in October 1998, another streak of +120 readings began that lasted 26 months through December 2000.
Even during the mid-oughts bull market from 2003 through 2007, Consumer Confidence never ticked above 120. And during the current bull market, it took 8 years of stock market gains and economic growth for the reading to finally tick above 120 and stay there for an extended period. The current streak of 11 months above 120 began last July and continued this month.
While it’s a good sign that consumers are finally feeling positive again, we can’t help but worry about over-confidence and/or complacency eventually setting in. While the economy was rolling in the late 1960s and the late 1990s, the 1970s and the Dot Com crash immediately followed them. Eventually the current streak of +120 readings will come to an end, and when it does, hopefully a period like the 1970s or early 2000s doesn’t follow!