Consumer confidence highest in nearly 18 years
Building on modest increases in July, consumer confidence skyrocketed in August to hit its highest level in years.
The Consumer Confidence Index now stands at 133.4, up from 127.9 in July — its highest level since October 2000, according to The Confidence Board. The “present situation” index increased from 166.1 to 172.2, while the “expectations” index increased from 102.4 last month to 107.6 this month.
“Consumer confidence increased to its highest level since October 2000 (Index, 135.8), following a modest improvement in July,” said Lynn Franco, director of economic indicators at The Conference Board.
“Consumers’ assessment of current business and labor market conditions improved further. Expectations, which had declined in June and July, bounced back in August and continue to suggest solid economic growth for the remainder of 2018,” Franco added. “Overall, these historically high confidence levels should continue to support healthy consumer spending in the near-term.”
Consumers’ appraisal of current conditions improved further in August. Those stating business conditions are “good” increased from 38.1% to 40.3%, while those saying business conditions are “bad” declined from 10.3% to 9.1%.
Appraisal of the labor market was also more favorable. Those claiming jobs are “plentiful” was virtually unchanged at 42.7%, while those claiming jobs are “hard to get” declined from 14.8% to 12.7%.
Optimism about the short-term outlook also bounced back in August. The percentage of consumers anticipating business conditions will improve over the next six months increased from 22.9% to 24.3%, but those expecting business conditions will worsen marginally rose, from 10.3% to 10.5%.
Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs in the months ahead decreased from 22.6% to 21.7%, while those anticipating fewer jobs also decreased, from 15.2% to 14.1%.
When it comes to their short-term income prospects, the percentage of consumers expecting an improvement rose from 20.4% to 25.5%, while the proportion expecting a decrease declined, from 9.4% to 7.0%.
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