Consumer Confidence Pushes Higher

Neither Hurricane Harvey nor political instability nor housing market volatility appears to dampening consumers’ enthusiasm, said The Conference Board, New York.

The Conference Board Consumer Confidence Index rose again in August, now standing at 122.9, up from 120.0 in July. The Present Situation Index increased from 145.4 to 151.2, while the Expectations Index rose marginally from 103.0 last month to 104.0.

Consumer confidence is just below its 16-year high set in March and well above last year’s average of 99.8.

“Consumers’ more buoyant assessment of present-day conditions was the primary driver of the boost in confidence,” said Lynn Franco, Director of Economic Indicators with The Conference Board. “Consumers’ short-term expectations were relatively flat, though still optimistic, suggesting that they do not anticipate an acceleration in the pace of economic activity in the months ahead.”

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., also described sentiment as “buoyant,” noting continued strengthening in the labor market.

“The favorable view of labor market conditions has lent support to consumers’ views of future income,” Vitner said. “While it is still too early to tell the extent of the damage done by Hurricane Harvey, we expect continued strength in the labor market to help overcome the near-term setbacks related to the storm.”

The report said consumers’ appraisal of current conditions improved further in August. Those saying business conditions are “good” increased from 32.5 percent to 34.5 percent, while those saying business conditions are “bad” moderated from 13.5 percent to 13.1 percent. Consumers’ assessment of the labor market was also more upbeat. Those stating jobs are “plentiful” rose from 33.2 percent to 35.4 percent, while those claiming jobs are “hard to get” decreased from 18.7 percent to 17.3 percent.

Consumers’ optimism about the short-term outlook was relatively flat in August. The percentage of consumers expecting business conditions to improve over the next six months decreased from 22.4 percent to 19.6 percent, but those expecting business conditions to worsen declined from 8.4 percent to 7.3 percent.

Consumers’ outlook for the labor market was also mixed. The proportion expecting more jobs in the months ahead declined from 18.5 percent to 17.1 percent, while those anticipating fewer jobs decreased marginally from 13.2 percent to 13.0 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement increased moderately from 20.0 percent to 20.9 percent, while the proportion expecting a decline decreased from 9.5 percent to 7.8 percent.