Consumers buoyant in August as confidence rises

Consumer confidence increased in August to the second highest level since late 2000.



The Conference Board's Consumer Confidence Index rose to 122.9 in August, up from 120 in the prior month. Economists had expected the index to rise to 122.5 in August.



The Present Situation Index increased from 145.4 to 151.2. The Expectations Index rose marginally from 103.0 last month to 104.0.



"Consumers' more buoyant assessment of present-day conditions was the primary driver of the boost in confidence, with the Present Situation Index continuing to hover at a 16-year high (July 2001, 151.3)," said Lynn Franco, director of economic indicators at The Conference Board



Franco added that consumers' short-term expectations were relatively flat, though still optimistic, "suggesting that they do not anticipate an acceleration in the pace of economic activity in the months ahead."



Consumers' appraisal of current conditions improved further in August. Those saying business conditions are "good" increased from 32.5% to 34.5%, while those saying business conditions are "bad" moderated from 13.5% to 13.1%.



Consumers' assessment of the labor market was also more upbeat. Those stating jobs are "plentiful" rose from 33.2% to 35.4%, while those claiming jobs are "hard to get" decreased from 18.7% to 17.3%.



Consumers' optimism about the short-term outlook, however, was relatively flat in August. The percentage of consumers expecting business conditions to improve over the next six months decreased from 22.4% to 19.6%, but those expecting business conditions to worsen declined from 8.4% to 7.3%.