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The Conference Board's Consumer Confidence Index (CCI) inched higher during May, after easing a bit between March and April. This plateauing of the CCI comes on the heels of the very sharp improvement in confidence readings registered over the November-March period. With a May 2002 reading of 109.8 on the Conference Board's scale where average confidence during the year 1985 is equal to an index level of 100, the most recent composite CCI was 1.2% higher than in April, but 5.4% lower than during May of 2001.
The "Present Situation" sub-index of the CCI rose a solid 3.3% during May, but remained 30.9% below the super-confident May 2001 index level. The "Expectations" (defined as six months out into the future) component of the CCI was a scant 0.2% lower this May than the month before. But compared to May 2001, the "Expectations" component has improved by 25.6% -- a very positive sign for the future direction and strength of consumer spending over the balance of 2002.
The CCIs for five of the nations' nine geographic regions rose between April and May. The sharpest gains were recorded in the Pacific Coast (+8.2%) and Rocky Mountain (+6.5%) regions of the country. Surprisingly steep over-the-month declines in consumer confidence occurred in the West South Central (-12.8%) and West North Central (-11.5%) groups of states.
Overall confidence levels this May were higher than consumer's overall assessment of economic conditions during the same month of 2001 for only one region of the nation, the Pacific Coast (+2.5%) states. Double-digit over-the-year declines were recorded in the West North Central (-21.4%) and West South Central (-10.1%) regions.
And in a separate part of the May consumer survey commissioned by the Conference Board, we failed to see evidence of any improvement in the actual buying plans (as opposed to subjective "confidence" sentiment) of American households.
The percentage of consumers surveyed nationwide by the Conference Board indicating that they planned to buy a home (either new or existing) at some time during the next six months declined from 3.9% in April to 3.6% during May. This was marginally lower than the 3.7% average recorded for full-year 2001, and unchanged from the May 2001 reading.
Motor vehicle purchase plans also eased slightly between April and May. During May 2002, 7.7% of those surveyed said that they planned to buy a car (either new or used) in the near future, down from the 7.8% recorded during April. And this was sharply lower than the 9.5% share recorded during May of 2001.
In addition, consumers during May were much less enthusiastic about other potential "medium-ticket" purchases over the next six months of this year. An estimated 27.6% of consumers surveyed during the month said that they planned to purchase one or more major appliances over the next six months, much lower than the 31.3% level recorded during April or the 30.9% share from May 2001.
