As Covid case counts were rising in the South and Southwest earlier this month, Consumer Confidence took a hit in July as the Conference Board’s Index of Consumer Confidence dropped from 98.3 down to 92.6, which was below the consensus forecast of 95.0.  While many economic indicators have seen significant bouncebacks in recent weeks, Consumer Confidence hasn’t been one of them.  However, if the recent declines in case counts among many of the problem states continue to recede that could provide a boost to sentiment in August.

Underneath the surface, this month’s report was mixed.  While the Expectations component dipped along with the headline inline, the reading on current conditions saw a modest increase.

Due to the diverging paths of the Expectations and Present Situations indices, the spread between the two actually moved back into positive territory.  This is notable in that normally once the spread turns meaningfully negative, it takes months for it to bounce back to positive levels.

The last item we wanted to highlight is the index of Jobs Plentiful. In July this reading bounced to 21.3 from 20.5. Two things to note with this index concern the recent low reading and the current level.  Regarding the recent trough of 16.5, if that low holds, it would be the highest trough for the indicator during and coming out of a recession since the mid-1960s.  In terms of the current level, we would note that back in the early 2000s we saw a similar bounce before the index started to roll over again.  Based on July’s pullback in the overall headline reading, a rollover in this index next month (like the one in 2002) wouldn’t be a welcome development. Click here to view Bespoke’s premium membership options for our best research available.

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