Good economic news returned this morning, which runs counter to a recent trend of less-than-overwhelming business metrics and surveys. Specifically, the Conference Board, a New York-based research organization, reported that its confidence survey jumped to a reading of 68.1 this month, following an upwardly revised estimate for March of 61.9. Initially, the March result had been tabulated at 59.7.
Interestingly, the April number largely matched the February result of 68.0. This has become an increasingly volatile metric, which has been ranging between 58.4 (in January) and 73.1 (last October) for the past year, or so. This latest result, therefore, is near the higher end for that time span.
Meanwhile, the Present Situations Index, one of this report's individual components, and a category that often trails the aggregate index number, edged up this month, rising from 59.2 to 60.4. Also, the Expectations Index, which because of its forward-looking nature tends to be more upbeat, also increased. But there, the gain was noteworthy, with this survey soaring from March's 63.7 to the latest reading of 73.3.
The Consumer Confidence Survey is based on a probability-design random sample. The cutoff data for the April result was April 18th. According to the Conference Board "Consumer Confidence improved in April, as consumers' expectations about the short-term economic outlook and their income prospects improved. However, consumers' confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike, and the sequester.'' Our sense, therefore, is that it is too soon to declare that this is a long-term uptrend.
However, there is little denying that this was a positive report, and at least for one month, consumers are considerably more upbeat about the short-term outlook.
On the other hand, the optimism engendered by this report was countered to some degree by news issued at the same time that the Chicago-area purchasing managers had reported that its index of industrial activity in and around the Windy City had fallen to a three-and-a-half-year low, dropping to a reading of 49.0 in April from 52.4 in March. Expectations had been for a survey result of 53.0. The significance of this regional data is that the Institute for Supply Management will issue its survey on national manufacturing activity tomorrow morning at 10:00 (EDT). Here, expectations are for further expansion, albeit at a slightly lesser rate. At the time of this article's writing, the author did not have positions in any of the companies mentioned.