Confident Consumers Should Continue to Drive Growth
Aug 30, 2017
Consumer confidence improved unexpectedly in August according to the Conference Board’s latest release. The headline index rose from a revised 120.0 in July (previously 121.1) to 122.9 in August, the second strongest reading since 2000. The better headline level was supported by gains in both the current assessment and future expectations indices. The expectations index inched higher from 103.0 to 104.0 while the assessment of the current situation jumped from 145.4 to 151.2. Consumers expressed more confidence in current business conditions, but the biggest improvement was in their assessments of the labor market. The labor market differential – % that believe jobs are plentiful minus the % that believe jobs are hard to get – hit a new high for the cycle and the strongest level since July 2001. Looking ahead, consumers expect both the improvement business conditions and employment opportunities to moderate over the next six months but more believe their incomes will rise. The difference between the percentage of those expecting their incomes to rise and those expecting their incomes to decline hit its second highest level since 2006.