BofA's U.S. Consumer Confidence Reading Rises to Post-Pandemic High
Stephen Juneau, a U.S. economist at BofA Securities, notes that the bank’s measure of consumer confidence increased further in the last two weeks. BofA US Consumer Confidence Indicator rose from 44.6 to a fresh post-pandemic high of 45.3.
An increase was mostly influenced by a pickup in the expectations index, followed by also a modest increase in the current conditions index.
“It is likely that the gain in confidence over the past few weeks has been due to an improving virus situation and a stronger labor market. Importantly, we still do not see any clear evidence that the expiration of the additional unemployment benefit at the end of July has affected confidence. Indeed, confidence for lower income and middle income respondents increased since our last update, while confidence fell slightly for higher income households,” Juneau wrote in a note to clients.
By applying the 14-day moving average of our confidence measure, the analyst notes a momentum behind the recent rise in confidence.
“We think the increase in our confidence index presents an upside risk to our consumer sentiment forecast for a modest decline in the preliminary September reading, as our measure tends to track consumer sentiment closely”.
On the elections, Juneau notes that the gap between Trump and Biden has narrowed, when it comes to the question “Under which candidate, would you feel the most positive about the US economy”.
The difference between the two was as much as 15% in May this year, before plunging to just a bit over 5% in September.
“We find that more respondents still would feel most positive about the economy under President Trump, but the gap between Trump and Biden has closed considerably since early April,” Juneau comments.
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