Consumer confidence rises for first time in four months

Consumers were more confident in August as they grew more optimistic about the economy and gas prices declined.   

The Conference Board’s Consumer Confidence Index increased in August to 103.2, up from 95.3 in July.  The increase followed three months of consecutive declines.

“Purchasing intentions increased after a July pullback, and vacation intentions reached an 8-month high,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Looking ahead, August’s improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term.”

The Present Situation Index —  based on consumers’ assessment of current business and labor market conditions — improved to 145.4 from 139.7 last month. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — increased to 75.1 from 65.6.

“The Present Situation Index recorded a gain for the first time since March,” said Franco. “The Expectations Index likewise improved from July’s nine-year low, but remains below a reading of 80, suggesting recession risks continue. Concerns about inflation continued their retreat but remained elevated.”

Highlights from August report are below.

Present Situation

Consumers’ appraisal of current business conditions  was more favorable in August:

• 19.2% of consumers said business conditions were “good,” up from 16.3%.
• 23.2% of consumers said business conditions were “bad,” down from 24.2%.

Consumers’ assessment of the labor market was mixed:

• 48.0% of consumers said jobs were “plentiful,” down from 49.2%;
• But 11.4% of consumers said jobs were “hard to get,” down from 12.4%.

Expectations Six Months Out

Consumers were more positive about the short-term business conditions outlook in August.

• 17.5% of consumers expect business conditions will improve, up from 13.7%.
• 22.3% expect business conditions to worsen, down from 26.2%.

Consumers were more optimistic about the short-term labor market outlook.

• 17.4% of consumers expect more jobs to be available, up from 15.1%.

   •19.3% anticipate fewer jobs, down from 21.1%.

Consumers were more positive about their short-term financial prospects:  

• 15.8% of consumers expect their incomes to increase, up from 15.3%.
• 14.5% expect their incomes will decrease, down from 15.5%.