Conference Board's Franco: Consumers Are Still Cautious (Audio)

from Bentley University. Because business is everywhere, Prepare here right now. We've got the SMP five hundred index down ten at two thousand eighty eight, a drop of five tenths of one percent down. Industrials down a hundred and forty five points down eight tenths of one percent. Has Stacktown six a drop of point one percent ten. You're up three thirty second, Zeal there one point eight three percent, Gold up three to twelve seventeen twenty, a gain of three

tenths of one percent. Crude lower little changed. West Texas Intermediate down thirteen cents to forty nine nineteen of barrel, a drop of three tenths of one percent. I'm Charlie Pellett, and that's a bloom Bird business flash. This is taking stock with bim Box and Kathleen Hayes on bloom Bird Radio. The US consumer is sending mixed signals gauges of US consumer confidence well, fostering uncertainty about whether the reason pickup

in consumer spending will be sustained throughout the summer. For example, the Conference boards Consumer Confidence Index fell to nine two point six in May from an upwardly revised ninety four point seven in April, and it was the second consent consecutive monthly decline. Let's find out what it all means. From Lynn Franco, Director of Economic Indicators for the Conference Board. Then, thanks very much for being with us. You're quite welcome.

So how do we calculate this? How do we make sense of the of these almost divergent reports of the consumer. The Conference Board's Consumer Confidence Index, as I indicated, that fell, But if you look back the last Friday, the University of Michigan had their report seemed to contradict what this report says. What's going on? Well, I think you know ours is a little bit more focused on the job situation. Um and despite this decline. I think that pretty much.

It's been the same message for several months now, and that's a looking ahead. Consumers are quite cautious, both in terms of the economic outlook and also in terms of the employment outlook. Well. Of course, that employment outlook is reflected very directly in your questions, are jobs more plentiful, not so plentiful or hard to get? Because the plentiful part didn't change so much, but the hard to get

number moved up a bit. Yes, we had some of heard mobility there, and if you take a look at the expectations, um, you know, six months down the road, there was an increase in nose saying to take expect fewer jobs to pay available. And I think this really translates into what we're sort of seeing a little bit in the labor market, is that job growth may be slowing.

I think the expectations are for about a hundred and sixty thou jobs, perhaps less because the Verizon strike at the end of this week, but clearly a little bit slower than the two hundred plus that we had averaged earlier months. Do you think that, based on the information line, that it is sustainable throughout the remainder of the year. I think in terms of confidence levels, I mean there's still not enough I think momentum to to really give

consumers additional confidence. Again, on the other side, is not enough to take it away. So I think we stay sort of in the zone where we continue, you know, with growth around two two and a half percent. Uh, clearly no no significant take up, and I think that you know, casts a little bit of a cloud over consumers. A slowing job market can also cast a bit of

a cloud this level of consumer confidence. Does it correlate in any way with a certain level of personal consumption expenditures PC as a key part of the GDP report, or even more broadly with GDP, Well, I think, you know, one key slight silver lining that we can take away from this report is that we did see a little bit of a nut chick. Obviously a month does not

a trend to make in consumers income expectation. So I think if that continues to hold ups and I think, you know, we'll continue to see consumers spending sort of at the same pace, But nothing in this would indicate that we're going to get a big surge in spending or being declined either. Then the conference Sports Consumer Confidence index is that its lowest level in six months. When should we start to be concerned? I think if we begin to see very sharp declined in the expectations and

the present situation, we should become concerned. For now, it's been much more of a sideways movement. I think that has to do with a lack of strength. Let's say, in the economy, we've been growing at a rather sort of lackluster pace, and I think that's reflected in the confidence numbers. Uh, the feder reserve. What's the bet from

the conference board? Right now? And when the Fed moves on that key rate for the first time this year, I think we'll see movement probably over the next two to three months, so June July and there's no meaning in August. Probably during the summer, yes, so um, I think I think the majority of folks are anticipating a summertime increase, a summertime increase. How will that or do we not know? How will that affect the consumer confidence report?

How will they filter into such a report? Well, you know, we do ask about their expectations regarding interest rates, So folks are you know they do foresee a rate hike in the foreseeable future, So I don't think that will come as a shock. So I think it's really going to come down to what's happening in terms of the labor market, what's happening in terms of wages, and whether or not the economy can pick up a little steam,

which we and anticipate. How accurately, how closely does your consumer confidence report track correlate with even um sort of predict where consumer spendings going in the United States? Well, I think, you know, confidences is only one factor. I mean, you have to have an ability to spend as well. So despite the decline that we've seen in confidence over the last several months, we're still at relatively good readings.

So as long as consumers have that ability, you know, in terms of credit, in terms of wages and a desire. I mean, we've seen a consumer now that's become very selective. Uh So they're looking for bargains, they're looking for initiatives. They do have spending power, but they're being very selective as to when they use that. All right, Lin Franco, thank you so very much for joining us to talk to us about the Consumer Confidence Report. A little bit

of a pullback in the latest report. She's the director of Economic Indicators at the Conference Board and Pam, I think the report today that really got the most detention was that consumer spending out. We're gonna be speaking, of course to Carl Rickadonna from Bloomberg Intelligence later in the show, but that certainly was a boost of stocks. And but there's a lot of focus right now on global markets

and global events. We'll just to give you the details personal spending and that measures how much Americans paid for everything from I don't know, clothing to uh two food items increased one percent in April from month earlier, and that was the biggest one month jump since August of two thousand nine. So we're gonna keep it going here. On taking Stock, I'm Kathleen Haze along with Pim Fox. We're gonna be looking at VW and we're gonna get

a preview of testla's shareholder meeting. All this coming up now on Bloomberg Radio. Coming up on taking Stock, we're going to take stock of Quervo find out if it tequila maker will actually raise a billion dollars in an I p o. We've got the details coming up. If you