US Consumer Confidence Improves to Near 8-year High

It appears that consumer confidence is on the rise again. As a matter of fact, consumers seem to be nearly as hopeful in the American economy as they were a year ago, according to recent assessments of present business conditions. Indeed, data shows that the labor market jumped significantly month-over-month as described in a recent report from the Conference Board, which is an independent business membership and research organization.

The Board says, more specifically, that the consumer confidence index rose from [a revised] 96.7 in July to 101.1 in August. By the way, that is the best market measure since September of 2015 (so, as stated, nearly a year). Accordingly, the present conditions index grew from a revised 118.8 to reach 123.0 while the expectations index also grew: from 82.0 in July to 86.4. In addition, the labor differential—the number of jobs that are hard to get subtracted from the number of plentiful jobs—improved from an unimpressive 0.9 to 2.6, which is its highest reading since 2008.

And July marks the fourth straight month of growth.

According to Lynn Franco, the director of economic indicators at the Conference Board,

“Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month. Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pickup in growth in the coming months.”

Furthermore, the Conference Board also says that labor market and wages have a more favorable outlook as well.

Indeed, the percentage of Americans who expect business conditions to continue improving over the next six months has increased from 15.7 percent to 17.3 percent. At the same time, the percentage of Americans who expect conditions to worsen fell from 12.4 percent to 11.1 percent.

As such, the Labor Market released its August 2016 jobs report, on Friday. Now economists expect that non-farm payrolls will grow by a seasonally adjusted 180,000 from the previous month. While this is a slowdown between June and July, but pretty much in line with the average monthly increase on year so far: 186,000.

To assert the good news, Federal Reserve vice chairman Stanley Fischer said that the US labor market is near full strength.

 

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