The Conference Board’s Consumer Confidence Index, which had deteriorated last month, bounced back in August. The Index now stands at 81.3 (1985=100), up from 77 in July. The Expectations Index increased to 94.4 from 86.3. The Present Situation Index, however, declined to 61.6 from 63.
“The welcome bounce back in confidence this month was entirely due to consumers’ increasing optimism about the future,” says Lynn Franco, director of The Conference Board’s Consumer Research Center. “Growing optimism about the economy over the next six months echoes the latest gain in The Conference Board’s Leading Economic Index. However, continued optimism will depend on positive developments in the labor market.”
Consumers’ six-month expectations gained ground from last month. Those anticipating that business conditions will improve over the next six months rose to 22.5% from 20%. Consumers expecting conditions to deteriorate fell to 10.7% from 11.4%.
But consumers’ appraisal of current business conditions remains lackluster. Those rating present business conditions as “bad” edged up to 30.9% from 30.2%, while those holding the opposite view declined to 15.9% from 16.5%. Labor market conditions were mixed. Those reporting jobs are “hard to get” rose to 34.1% from 32.7% last month. Consumers claiming jobs are “plentiful,” however, increased to 11.1% from 10.7%.
The employment outlook, however, is more favorable. Consumers anticipating the job market to improve in the coming months increased to 18% from 16.6%. Those expecting fewer jobs to become available declined to 18.6% from 19.6%. The proportion of consumers anticipating an increase in their incomes jumped to 20.1% from 15.9%.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup. The cutoff date for August’s preliminary results was August 19.