Improving outlook bolsters consumer confidence
A monthly measure of consumer confidence has edged up as expectations for improving business and labor prospects offset less upbeat assessments of current conditions.
The Conference Board reported that its Consumer Confidence Index (CCI) rose five-tenths of a point to 81.5 for August.
A component of the index tracking short-term expectations advanced, while a component tracking current conditions retreated.
“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,” said Lynn Franco, director of economic indicators for the Conference Board.
The Conference Board, a business research and membership group, bases the CCI on the results of monthly surveys of U.S. households.
Economists closely monitor the CCI because consumer spending accounts for more than two-thirds of economic activity in the country.
Less optimistic assessments of current business and labor conditions pulled down the present situation component of the CCI nearly three points to 70.7.
The proportion of consumers responding to the survey upon which the August CCI was based who described business conditions as “good” fell 2.4 points to 18.4 percent. The share of those who characterized business conditions as “bad” held steady at 24.8 percent.
The proportion of consumers who called jobs “plentiful” fell nearly a point to 11.4 percent. But the share of those who said jobs are “hard to get” fell 2.2 points to 33 percent.
An improving outlook pushed up the expectations component of the CCI up almost two points to 88.7.
The share of consumers who said they expect business conditions to improve over the next six months edged up two-tenths of a point to 20.1 percent. The proportion of those anticipating worsening conditions slipped two-tenths to 11.1 percent.
The share of consumers who anticipate more jobs in the months ahead increased nearly a point to 17.6 percent, while the proportion of those who believe fewer jobs will be available dipped four-tenths to 17.3 percent.
Meanwhile, 17.4 percent of consumers said they expect their incomes to increase, up 1.7 points. The share of those expecting a decrease edged down two-tenths to 13.5 percent.