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Bloomberg Consumer Comfort Index Dips after Previous Week’s Rise

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Jul. 10 2015, Published 4:07 p.m. ET

Consumer comfort

The Bloomberg Consumer Comfort Index fell to 43.5 in the week ending July 5. The decline came after a sharp rise in the index, from 42.6 in the previous week to 44. The latest data for the Bloomberg Consumer Comfort Index were released on July 9. The index fell after advancing for three straight weeks due to global uncertainty.

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Bloomberg Consumer Comfort Index

The Bloomberg Consumer Comfort Index gauges consumer sentiment based on survey respondents’ perception about three things:

  • the state of the economy
  • an evaluation of personal finance
  • the timing of purchasing goods and services

The index is a four-week moving average and ranges from zero to 100. It’s based on a survey of 1,000 responses. The survey is conducted by Langer Research Associates for Bloomberg.

In the latest survey, respondents’ views on the state of the US economy declined to 33.4 from 34.6 in the previous week. Respondents who feel that it’s a good time to purchase goods and services are also more scarce. This measure fell to 37.7 from 38.9 in the previous week. Personal finance sentiment increased to 59.3 from 58.6 in the previous week. The fifth straight weekly gain in the personal finance index might be the result of an improved job market.

The decline in consumer sentiment results from the situation in Greece and the turmoil in China’s stock markets.

Decline unfavorable for department stores

The decline in the Bloomberg Consumer Comfort Index is unfavorable for department stores. Consumer sentiment about the economy influences consumer spending on discretionary items sold by department stores including Macy’s (M), Sears (SHLD), Nordstrom (JWN), JCPenney (JCP), and Kohl’s (KSS).

Macy’s, Nordstrom, and Kohl’s together account for ~2% of the portfolio holdings of the Consumer Discretionary Select Sector SPDR Fund (XLY).

Consumer sentiment also affects same-store sales at department stores, which is discussed in Part 3 of this series.

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