US: Conference Board’s consumer confidence index to fall slightly to 117.0 in July - Nomura

The US June Conference Board Report showed continued heightened optimism but consumers’ assessment of future conditions deteriorated slightly and analysts at Nomura expect the Conference Board’s consumer confidence index to fall slightly to 117.0 in July from 118.9 in June.

Key Quotes

“Although our forecast for July still implies heightened sentiment, it reflects our view that recent downward shifts in expectations regarding the Trump administration’s policy promises may have dampened optimism. In line with this view, the preliminary July estimate of the University of Michigan consumer sentiment index fell 2.0pp to 93.1, driven by a drop in the future expectations index.”

“The decline in this forward looking index may have been a reflection of the decreasing likelihood of major policy promises being delivered. In particular, according to the Michigan survey, self-identified Republicans and independents have become increasingly skeptical of the current administration’s ability to enact its agenda. Recent setbacks in Congress with Republican’s efforts to repeal and replace the Affordable Care Act make it less likely for consumer confidence to improve further from currently high levels or even have the potential to weigh it down.”