A new measure of spending confidence edged lower in May—pointing to growth that will be sustained but moderate in certain discretionary goods categories.
The Spending Confidence Index™ is a measure of consumer sentiment created by MacroSavvy™ in partnership with Prosper Insights & Analytics. The white paper at this link explains why the new index is an improvement over existing measures of confidence.
The insights gained from the new index—and its 19 underlying subcategories—are clearer than the mixed picture painted by the other measures of confidence that are most widely followed, as is suggested by the summary table.
The latest data on the consumer confidence index from the Conference Board and the consumer sentiment index from the University of Michigan show a mix of components moving in opposing directions on a month-to-month and year-to-year basis.
Meanwhile, the Spending Confidence Index™ indicates:
- A month-to-month letup. The letup in spending confidence is primarily the result of a comparison to relatively strong prior months. Confidence remains up year-to-year and year-to-date at rates that are close to the trend of the past year.
- Discretionary goods strength. The month-to-month letup was focused in certain discretionary goods categories. However, the trend in these categories remains elevated and a focus of strength.
- Consumable goods weakness. Spending confidence remains relatively weaker in consumable goods categories. This partly reflects weak or declining prices in food and grocery categories, given the related price trends.
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