Consumer Confidence Climbs to Highest Level in Nearly a Year
Consumer confidence increased to an almost one-year high in August as Americans became more optimistic about the labor market, according to a report from the New York-based Conference Board on Aug. 30.
Key Points
• Confidence index advanced to 101.1 (forecast was 97), the highest since September, from 96.7.
• Present conditions gauge increased to 123, the best reading in nine years, from 118.8.
• Measure of consumer expectations for the next six months rose to 86.4, the highest since October, from 82.
• Share of those who said jobs were plentiful was the biggest since August 2007.
Big Picture
Strong employment that’s generating steadily rising pay is keeping Americans upbeat about the economy and its prospects. The biggest share of respondents since March 2015 said they expected their incomes to increase in the next six months, the report showed. Such optimism signals that consumer spending, coming off the best quarter since the end of 2014, will stay robust and provide the economy with a leg up in the third quarter.
Economist Takeaways
“Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month,” Lynn Franco, director of economic indicators at the Conference Board, said. “Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pickup in growth in the coming months.”
The Details
• Consumers were more optimistic about the labor market, as 14.2%, the most since October, said more jobs will be available in six months, up from 13.5%.
• The share who said jobs were plentiful increased to 26% from 23%.
• The difference between those who said jobs were plentiful and those who said they were hard to get was the widest since January 2008.
• The share of Americans who see their incomes increasing in the next six months rose to 18.8% from 17.1%.
• 17.3% of respondents said they saw an improvement in business conditions in the next six months, the most since October, from 15.7%.
• Respondents planning to buy new automobiles, homes and appliances in the next six months increased.
