NEW YORK – A pickup in consumer confidence to the second-highest level since late 2000 provide a basis for steady gains in spending, according to figures Tuesday from the New York-based Conference Board.
Highlights of Consumer Confidence (August)
- Confidence index rose to 122.9 (est. 120.7) from downwardly revised 120 in July
- Present conditions measure increased to 151.2, highest since July 2001, from 145.4
- Gauge of consumer expectations rose to 104 from 103
Key Takeaways
Americans have had much to lift their moods: optimism about the economy, steady hiring and unemployment at a 16-year low, in addition to contained inflation, home-price appreciation and stock-market gains. Improving consumer sentiment also bodes well for growth in household spending, the biggest part of the economy. The results reflect survey responses through Aug. 16, prior to Hurricane Harvey’s landfall in Texas.
The Conference Board’s data are in sync with other recent surveys. Sentiment climbed to a seven-month high in preliminary August data from the University of Michigan, and the Bloomberg Consumer Comfort Index posted the sixth consecutive gain to reach a 16-year high in the week ended Aug. 20.
Economist’s View
“Today’s report suggests that household confidence remains on a strong footing, and we view this as constructive for consumer spending in Q3,” Michael Gapen, New York-based chief U.S. economist at Barclays PLC, wrote in a note after the data.
Other Details
- Labor differential, measuring share of those saying jobs are plentiful minus share saying jobs are hard to get, widened to 18.1 points, the most since July 2001, from 14.5 points
- 19.6 percent of consumers said they expect better business conditions in next six months, down from 22.4 percent
- Share of households who expect incomes to rise in next six months increased to 20.9 percent in August, from 20 percent in July
- Share of those who said more jobs will be available in coming months fell to 17.1 percent from 18.5 percent
- Buying plans for automobiles and homes eased, while those for major appliances rose.
Shobhana Chandra is a reporter for Bloomberg News.
