The Economy

Consumer Confidence Shows Surprise Gain

The Conference Board's index rose to its second-highest level of the year despite economists' expectations of a drop.
Matthew HellerAugust 30, 2017

A measure of consumer confidence rose to its second-highest level of the year in a survey that also found consumers are becoming more upbeat about business conditions.

The Conference Board’s Consumer Confidence Index increased to 122.9 in August from 120.0 in July, despite economists’ expectations that it would decline. The index also beat expectations last month.

“Consumers’ more buoyant assessment of present-day conditions was the primary driver of the boost in confidence, with the Present Situation Index continuing to hover at a 16-year high,” Lynn Franco, director of economic indicators at The Conference Board, said in a news release.

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“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,” she added.

The Present Situation Index increased to 151.2 from 145.4, while the Expectations Index rose marginally to 104.0 from 103.0 last month.

The Conference Board also reported that those consumers saying business conditions are “good” increased in August from 32.5% to 34.5%, while those saying business conditions are “bad” moderated from 13.5% to 13.1%.

Consumers’ assessment of the labor market was also more upbeat, with those stating jobs are “plentiful” rising from 33.2% to 35.4% and those claiming jobs are “hard to get” decreasing from 18.7% to 17.3%.

As far as the short-term outlook, the percentage of consumers expecting business conditions to improve over the next six months fell from 22.4 % to 19.6%, but those expecting conditions to worsen declined from 8.4% to 7.3%.

The outlook for the labor market was also mixed. The proportion expecting more jobs in the months ahead declined from 18.5% to 17.1%, while those anticipating fewer jobs decreased marginally from 13.2% to 13.0%.

A recent New York Fed survey found more Americans are searching for jobs but they are becoming more pessimistic about receiving a job offer and expect employers to offer them less money.