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Consumer Confidence Nudges Up Ever So Slightly in August

Business

The U.S. consumer confidence index in August came in at 81.5, a slight increase from July’s reading of 81.0, the Conference Board said Tuesday.

“Consumer Confidence increased slightly in August, a result of improving short-term expectations. Consumers were moderately more upbeat about business, job and earning prospects,” said Lynn Franco, director of Economic Indicators.

“In fact, income expectations, which had declined sharply earlier this year with the payroll tax hike, have rebounded to their highest level in two and a half years. Consumers’ assessment of current business and labor market conditions, on the other hand, was somewhat less favorable than last month,” Franco said.

Conference Board Consumer Confidence Index (Bloomberg)

August’s improvement, though slight, is still better than what economists had originally predicted: They expected the index to decline to 78.0.

Consumers were slightly more upbeat about business, job and earning prospects, Franco said.

Meanwhile, the future expectations index rose to 88.7 from 86.0 in July, MarketWatch notes, while the present situation index fell to 70.7 from 73.6.

Consumer spending accounts for roughly 70 percent of economic growth. Therefore, changes in consumer sentiment have a direct effect on stocks.

However, markets today may be more concerned with the possibility of the U.S. going to war with Syria than they are with miniscule changes in consumer confidence:

Here are some additional takeaways from the Conference Board report:

Consumers ... stating business conditions are “good” decreased to 18.4 percent from 20.8 percent, while those stating business conditions are “bad” was virtually unchanged at 24.8 percent.

Consumers ... claiming jobs are “plentiful” decreased to 11.4 percent from 12.3 percent, while those claiming jobs are “hard to get” declined to 33.0 percent from 35.2 percent.

[...]

Those expecting business conditions to improve over the next six months edged up to 20.1 percent from 19.9 percent.

Those expecting business conditions to worsen declined slightly to 11.1 percent from 11.3 percent.

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Follow Becket Adams (@BecketAdams) on Twitter

Featured image Getty Images.

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