NEW YORK – Confidence among U.S. consumers improved in August for the second month in a row, according to a report today from The Conference Board.
The board’s Consumer Confidence Index rose 5 points this month to 56.9 (1985 = 100) – after edging up a point and a half the month before, from a June reading that was the lowest in 16 years (READ MORE) – as respondents’ hopes for the future outweighed their gloom about current employment and business conditions.
The August reading exceeded the most optimistic of estimates from a Bloomberg News survey of 70 economists.
Analysts had expected the index would climb only to 53 points, the survey found. Their estimates for the August CCI ranged from 50 to 56.1 points.
“Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement by early next year,” Lynn Franco, director of the board’s Consumer Research Center, said in a statement today.
“Declines in the Present Situation Index, both in terms of business conditions and the labor market, appear to be moderating,” she said. “The Expectations Index, which posted a significant gain this month, suggests better times may be ahead. However, overall readings are still quite low by historical standards and it is still too early to tell if the worst is behind us.”
The index reflecting consumer’s view of current conditions fell to 63.2 points from last month’s 65.8. The share of respondents seeing business conditions as bad rose to 33.2 percent from July’s 32.6 percent, while the share saying business conditions are good edged up to 13.4 percent from last month’s 13.2 percent. The share seeing jobs as hard to get rose to 32 percent from July’s 30.2 percent, while the share seeing jobs as plentiful fell to 13.1 percent from the previous 13.6 percent.
But the Expectations Index – a gauge of consumer hopes and fears for the economy over the next six months – continued to rebound from June’s record low reading, rising to 52.8 points this month from July’s 42.7-point score. More respondents said they would consider buying a home than in July, and more said they plan to buy a car or major appliance in the next six months.
The report is “very much a reflection of what’s been going on in the energy markets,” Richard DeKaser, chief economist at National City Corp. in Cleveland, told Bloomberg News. “Confidence remains quite low, principally because of concerns about employment prospects.”
The indexes are based on a monthly survey conducted for The Conference Board by custom research firm TNS. The cutoff date for this month’s preliminary results was Aug. 19.
The Conference Board is a nonpartisan, nonprofit business membership and research organization with offices in New York City, Chicago and abroad. Additional information is available at www.Conference-Board.org.
