The Conference Board’s Consumer Confidence Index increased slightly in August.
The index rose to 81.5 from 81 in July, according to data released today by the New York-based private research group, leaving the barometer of public sentiment slightly below an 82.1 reading in June, the highest since January of 2008.
“Consumer confidence increased slightly in August, a result of improving short-term expectations,” The Conference Board director of economic indicators Lynn Franco said in a statement. “Consumers were moderately more upbeat about business, job and earning prospects. In fact, income expectations, which had declined sharply earlier this year with the payroll tax hike, have rebounded to their highest level in 2-1/2 years. Consumers’ assessment of current business and labor market conditions, on the other hand, was somewhat less favorable than last month.”
Consumers’ assessment of current conditions moderately declined. Those who said business conditions are “good” decreased to 18.4 percent from 20.8 percent, and those who said business conditions are “bad” was virtually unchanged at 24.8 percent.
Consumers’ appraisal of the labor market was mixed. Those who said jobs are “plentiful” decreased to 11.4 percent from 12.3 percent, and those who said jobs are “hard to get” declined to 33 percent from 35.2 percent.
Bloomberg reported that sustained job growth and increased wealth tied to higher home values and stock portfolios are helping to sustain household spending, boosting automakers and home-improvement retailers such as Lowe’s Cos. Today’s report showed Americans expected more employment opportunities and income gains in the next six months.
“There’s continued good news households are hearing, whether it’s good news on jobs, good news on wealth,” Jonathan Basile, an economist at Credit Suisse in New York, told Bloomberg before the report was released. With interest rates stabilizing, “maybe there’s some diminished concern that rates are going higher.”
The Conference Board said consumers’ expectations, which had retreated in July, increased in August. Those expecting business conditions to improve during the next six months edged up to 20.1 percent from 19.9 percent. Those who expect business conditions to worsen declined slightly, to 11.1 percent, from 11.3 percent.