Consumer confidence popped solidly higher in August, reflecting declining gas prices but not improvement in current labor conditions. The Conference Board's index climbed back to levels during the spring, to 56.9 in August from 51.9 in July and posting its largest one-month gain since July last year. Improvement was centered in the expectations component which jumped more than 10 points for its biggest one-month gain in nearly three years. One-year inflation expectations really came back, down 8 tenths to 6.7 percent in evidence of the effect of lower gas prices.
But a major negative in the report is the assessment of the current jobs market. Those saying jobs are plentiful fell 5 tenths to 13.1 percent with those saying jobs are hard to get jumping 1.8 percentage points to 32.0 percent. These results point squarely at trouble for the August jobs report. Yet consumers at the same time suspect that the worst may be behind, with more saying more jobs will be available six months from now and less saying there will be fewer. And in another good sign, more say they plan to buy a house in the next six months, a gain likely tied to the assessment of the future jobs market.
Gains in today's report have to be put into perspective given that levels in June and July were among the very weakest in the 40 year history of the report. But the outlook data point to resilience in the consumer and emerging confidence that the worst is behind.
Market Consensus Before Announcement
The Conference Board's consumer confidence index rose 9 tenths to 51.9 in July. But the level is still among the very lowest in more than 40 years of data. Not only do higher gasoline prices have consumers depressed but also the weakening job market. Those saying jobs are currently hard to get rose to 30.3 percent for a 6 tenth gain in the month. Those saying jobs are plentiful fell 6 tenths to 13.5 percent. Inflation expectations remain severely elevated but slipped back 1 tenth to 7.6 percent.
Consumer confidence Consensus Forecast for August 08: 53.0
Range: 50.0 to 54.5 |
