Getting a move on

Travel trends suggest consumer confidence on the rise

Connecticut consumers are showing confidence in the economy even as some areas of weakness crop up, according to the author of the latest installment of the New Haven Register’s economic scorecard.

One measure of that confidence is that consumers are traveling at record levels this summer, said Donald Klepper-Smith, chief economist and director of research for New Haven-based DataCore Partners.

AAA Northeast is reporting the largest number of people traveling for the Fourth of July holiday since the organization began tracking holiday travel numbers nearly two decades ago, according to Fran Mayko, a spokeswoman for AAA Northeast. The start of the traditional summer season on Memorial Day weekend also saw travelers hitting the road in record numbers.

The level of travel is indicative of what KlepperSmith calls “a feel-good economy.”

“Consumer confidence numbers remain strong at this point,” he said.

Consumer confidence is one of eight indicators

used to develop the Register’s scorecard. And consumer confidence for May was up 26.3 percent compared to where it was during the same period a year ago, according to Klepper-Smith.

Consumer confidence was one of five indicators that Klepper-Smith said were headed in a positive direction, along with total employment, the unemployment rate, the consumer price index and median single-family housing prices. But whether the other indicators justify that kind of rise in consumer confidence levels is open to question.

Real disposable income is one of the three indicators Klepper-Smith said were headed in a negative direction in May. Real disposable income for the month was down one-tenth of a percentage point from where it was in May 2017.

“There’s not a lot of money left on the table at the end of the month,” he said. “My sense is what is left over is being spent on trips, and everything else is being thrown on people’s credit cards.”

Klepper-Smith said the 16 percent increase in median single-family housing prices is misleading.

“You can’t look at an increase of that size and say it accurately reflects the strength of the market,” he said. “There are some other factors involved here.”

Klepper-Smith said the increase in median singlefamily home prices is indicative of increased numbers of suburbanites moving out of Connecticut.

“That leads to sales of homes that have a higher valuation, which drives up the median price,” he said.

“There’s not a lot of money left on the table at the end of the month. My sense is what is left over is being spent on trips, and everything else is being thrown on people’s credit cards.”

— Donald Klepper-Smith, chief economist and director of research for New Haven-based Data Core Partners