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WASHINGTON – American consumers felt more confident in August as their outlook for the future improved.
The Conference Board, a business research group, said Tuesday that its consumer confidence index rose to 103.3 in August from 101.9 in July. The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
“Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at The Conference Board. “Consumers continued to express mixed feelings in August. Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market. Consumers’ assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic. This likely reflects the recent increase in unemployment. Consumers were also a bit less positive about future income.”
The measure of Americans’ short-term expectations for income, business and the job market rose to 82.5 from 81.1 in July. Consumers’ view of current conditions rose to 134.4 in August from 133.1 last month.
Consumer spending accounts for nearly 70% of U.S. economic activity and is closely watched by economists for signs how the American consumer is feeling. On a six-month moving average basis, purchasing plans for homes fell to a new 12-year low, while buying plans for cars improved slightly. Buying plans for big-ticket appliances were up on average but the increase was driven by only a few items: refrigerators, TVs and washing machines. Plans to buy a smartphone or laptop/PC in the next six months increased again.
Present situation
Consumers’ assessments of current business conditions were more positive in August.
20.8% of consumers said business conditions were “good,” up from 19.2% in July.
17.7% said business conditions were “bad,” down from 18.2%.
But consumers’ appraisals of the labor market deteriorated in August.
32.8% of consumers said jobs were “plentiful,” down from 33.4% in July.
16.4% of consumers said jobs were “hard to get,” slightly up from 16.3%.
Expectations six months hence
Consumers were more optimistic about the business conditions outlook in August.
18.4% of consumers expected business conditions to improve, up from 15.2% in July.
15.6% expected business conditions to worsen, down from 16.2%.
Consumers’ assessments of the labor market outlook were slightly less optimistic in August.
16.1% of consumers expected more jobs to be available, up from 15.2% in July.
17.5% anticipated fewer jobs, also up from 16.4%.
Consumers’ assessments of their income prospects were more pessimistic in August.
16.9% of consumers expected their incomes to increase, down from 17.2% in July.
12.7% expected their incomes to decrease, up from 11.6%.
The Associated Press contributed to this report.
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