Consumers are a tiny bit more optimistic about short-term prospects, sending the Conference Board’s Consumer Confidence Index up slightly to 81.5 from 81 last month.
Lynn Franco, director of economic indicators, said, “Consumer confidence increased slightly in August, a result of improving short-term expectations. Consumers were moderately more upbeat about business, job and earning prospects. 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.”
Dragging down the index was the assessment by consumers of current business and labor market conditions. Of the two components of the index, the present situation portion that measures current business and labor market conditions declined to 70.7 from 73.6. The other component, the expectations index, which measures short-term outlook six months out, rose to 88.7 from 86 last month.
Still, it’s the labor market that many keep tabs on to gauge consumers’ assessment of the economy and how willing they may be to spend their discretionary income at retail.
As for current conditions, respondents who said jobs are “plentiful” fell to 11.4 percent from 12.3 percent, while those who said jobs are “hard to get” decreased to 33 percent from 35.2 percent.
Looking ahead, consumers were slightly more upbeat about the labor market, but not by much. Those who said jobs would be more plentiful in the months ahead rose to 17.6 percent from 16.7 percent last month. Respondents who anticipated fewer jobs was down to 17.3 percent from 17.7 percent.