The Conference Board Consumer Confidence Index, which had improved moderately in July, made further gains in August. The Index now stands at 56.9 (1985=100), up from 51.9 in July. The Present Situation Index decreased to 63.2 from 65.8 last month. The Expectations Index, however, increased to 52.8 from 42.7 in July.
“Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement by early next year,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Declines in the Present Situation Index, both in terms of business conditions and the labor market, appear to be moderating. 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.”
Consumers’ assessment of current conditions did not improve in August. Those claiming business conditions are “bad” increased to 33.2 percent from 32.6 percent, while those claiming business conditions are “good” edged up to 13.4 percent from 13.2 percent last month.
Consumers’ appraisal of the labor market has turned bleaker. Those saying jobs are “hard to get” rose to 32 percent from 30.2 percent in July, while those claiming jobs are “plentiful” declined to 13.1percent from 13.6 percent.
Consumers’ short-term expectations improved again, but still remain quite negative. Those expecting business conditions to worsen over the next six months declined to 25.8 percent from 32.4 percent, while those expecting conditions to improve rose to 11.9 percent from 9.2 percent. The outlook for the labor market was also less pessimistic. The percent of consumers anticipating fewer jobs in the months ahead decreased to 30.6 percent from 37.3 percent, while those expecting more jobs increased to 10.5 percent from 8 percent. The proportion of consumers anticipating their incomes will increase improved slightly to 14.7 percent from 14.3 percent.
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 TNS. TNS a custom research company. The cutoff date for August’s preliminary results was Aug. 19.