Consumer confidence inches up in August to highest level in six months
Consumers are feeling more confident even as they grow more concerned about the labor market.
The Conference Board’s Consumer Confidence Index rose in August to a better-than-expected reading of 103.3 — its highest reading since February — from an upwardly revised 101.9 in July. The Present Situation Index — based on consumers' assessment of current business and labor market conditions — rose to 134.4 from 133.1 in July.
The Expectations Index — based on consumers' short-term outlook for income, business, and labor market conditions — also improved in August, rising to 82.5 from 81.1 in July. August marked the second consecutive month that the expectations reading was above 80.
The improved readings came as consumers' perceived likelihood of a U.S. recession over the next 12 months was virtually unchanged, and was well below the 2023 peak.
Although consumers were feeling more upbeat, their worries about the labor market were increasing.
"Consumers continued to express mixed feelings in August,” said Dana M. Peterson, chief economist at The Conference Board. “Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market.”
Consumers' assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic, which likely reflected recent increases in unemployment, Peterson added.
On a six-month moving average basis, purchasing plans for homes fell to a new 12-year low, while buying plans for cars improved slightly. Buying plans for big-ticket appliances were up on average but the increase was driven by only a few items: refrigerators, TVs and washing machines. Plans to buy a smartphone or laptop/PC in the next six months increased again.
In August write-in responses, the share of respondents believing the 2024 elections would impact the economy was stable, at slightly above 2020 levels, but well below the August 2016 level.
Despite the overall improvement in the headline Index, confidence declined for consumers earning less than $25K. On a six-month moving average basis, consumers earning over $100K remained the most confident.
Here are other findings from the preliminary August report.
Present situation
Consumers' assessments of current business conditions were more positive in August.
- 20.8% of consumers said business conditions were "good," up from 19.2% in July.
- 17.7% said business conditions were "bad," down from 18.2%.
But consumers' appraisals of the labor market deteriorated in August.
- 32.8% of consumers said jobs were "plentiful," down from 33.4% in July.
- 16.4% of consumers said jobs were "hard to get," slightly up from 16.3%.
Expectations six months hence
Consumers were more optimistic about the business conditions outlook in August.
- 18.4% of consumers expected business conditions to improve, up from 15.2% in July.
- 15.6% expected business conditions to worsen, down from 16.2%.
Consumers' assessments of the labor market outlook were slightly less optimistic in August.
- 16.1% of consumers expected more jobs to be available, up from 15.2% in July.
- 17.5% anticipated fewer jobs, also up from 16.4%.
Consumers' assessments of their income prospects were more pessimistic in August.
- 16.9% of consumers expected their incomes to increase, down from 17.2% in July.
- 12.7% expected their incomes to decrease, up from 11.6%.
Assessment of Family Finances
- Consumers' assessment of their family's current financial situation weakened further in August.
- However, consumers' assessments of their Family's Financial Situation going forward improved.
The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers.
The cutoff date for the preliminary results was Aug. 21.
