Consumer Confidence Bounces Back in August

The Conference Board Consumer Confidence Index, which had retreated in July, rebounded in August and now stands at 54.1 (1985=100), up from 47.4 in July, The Conference Board reported today.

The Present Situation Index increased slightly, to 24.9 from 23.3 in July, mainly due to an improvement in consumers' assessment of the job market, it said.

Meanwhile, The Expectations Index improved to 73.5 from 63.4 in July—and is now at its highest level since December 2007 (Index, 75.8), the Board also reported.

"Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations," said Lynn Franco, director of The Conference Board Consumer Research Center. "And, as long as earnings continue to weigh heavily on consumers' minds, spending is likely to remain constrained."

Additional details issued by the Board:

• Consumers' assessment of current conditions improved slightly in August. Those claiming business conditions are "bad" decreased to 45.6% from 46.5%; however, those claiming conditions are "good" decreased to 8.6% from 8.9%.
• Consumers' appraisal of the job market was more favorable this month. Those saying jobs are "hard to get" decreased to 45.1% from 48.5%, while those claiming jobs are "plentiful" increased to 4.2% from 3.7%.
• Consumers' short-term outlook was much improved from last month. Those expecting an improvement in business conditions over the next six months increased to 22.4% from 18.4%. Those anticipating conditions to worsen decreased to 15.8% from 19.0%.
• The labor market outlook was also more upbeat. The percentage of consumers expecting more jobs in the months ahead increased to 18.4% from 15.5%, while those expecting fewer jobs decreased to 23.3% from 26.1%. The proportion of consumers expecting an increase in their incomes increased slightly to 10.6% from 10.1%.

About the data: The Consumer Confidence Survey is based on a representative sample of 5,000 US households. The monthly survey is conducted for The Conference Board by TNS. The cutoff date for August's preliminary results was August 18.

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