August Consumer Confidence Eases

The Conference Board, New York, said its Consumer Confidence Index declined marginally in August, following July’s rebound.

The Index now stands at 135.1, down from 135.8 in July. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased from 170.9 to 177.2. The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, declined from 112.4 last month to 107.0 in August.

“While other parts of the economy may show some weakening, consumers have remained confident and willing to spend,” said Lynn Franco, Senior Director of Economic Indicators with The Conference Board. “However, if the recent escalation in trade and tariff tensions persists, it could potentially dampen consumers’ optimism regarding the short-term economic outlook.”

Mark Vitner, Senior Economist with Wells Fargo Securities, Charlotte, N.C., said between stock market jitters and trade war escalation, a lot ensued in the second half of the month. “One clear takeaway from today’s report is that consumers see the writing on the wall in terms of how long the good times can last,” he said.

The report said consumers’ assessment of current-day conditions improved in August. The percentage of consumers claiming business conditions are “good” increased from 39.9 percent to 42.0 percent, while those saying business conditions are “bad” decreased from 11.2 percent to 9.8 percent. Consumers’ appraisal of the job market was also more favorable. Those saying jobs are “plentiful” increased from 45.6 percent to 51.2 percent, while those claiming jobs are “hard to get” declined from 12.5 percent to 11.8 percent.

Consumers were moderately less optimistic about the short-term outlook in August. The percentage of consumers expecting business conditions will be better six months from now decreased from 24.0 percent to 21.9 percent, while those expecting business conditions will worsen increased from 8.4 percent to 10.0 percent.

Consumers’ outlook for the labor market was also slightly less positive. The proportion expecting more jobs in the months ahead decreased marginally from 19.9 percent to 19.7 percent, while those anticipating fewer jobs increased from 11.1 percent to 13.6 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased from 24.9 percent to 23.8 percent, however, the proportion expecting a decrease declined, from 6.6 percent to 5.8 percent.