Consumer Confidence Appears to Improve in August, Surprising Economists
NEW YORK (TheStreet) -- U.S. consumer confidence improved in August, surprising economists who had forecast a decline, as a cautious improvement in prospects for jobs and earning power lifted the Conference Board's Consumer Confidence Index to nearly a five-year high.
The Conference Board reported Tuesday that the Index, based on a random consumer sample survey of consumers around the country with a cutoff date of Aug. 15 for the most recent report, showed a rise to 81.5 from an upwardly-revised 81 in July.
The increase was a contrast to a survey of economists, who on average, were expecting a decline to 79, according to a Thomson Reuters. The cutoff date for the survey is noteworthy as it doesn't reflect the more recent pullbacks in stock market. The S&P 500 is poised to drop 2.6% this month, its worst monthly performance since May 2012.
Tuesday's report said that those expecting business conditions to improve over the next six months edged up to 20.1% from 19.9%. Those expecting business conditions to worsen declined slightly to 11.1% from 11.3%. At the same time, consumers anticipating more jobs in the months ahead increased to 17.6% from 16.7%, while those anticipating fewer jobs edged down to 17.3% from 17.7%.
The proportion of consumers expecting their incomes to increase improved to 17.4% from 15.7%; those expecting a decrease declined slightly to 13.5% from 13.7%.
"This improved view of the economy, while still much less upbeat than pre-recession norms, is supportive of our expectation that consumers activity will accelerate during the second half of this year and into 2014, and underpin a pickup in the pace of growth in the overall U.S. economy during the forecast horizon," David Onyett-Jeffries, a Toronto-based economist at RBC Economics, commented in a client note.
In a separate but related release earlier in the day, the S&P/Case-Shiller 20-City Composite U.S. home price index pointed to a bolstering of household balance sheets thanks to rising house prices. The seasonally-adjusted gauge increased 0.9% sequentially in June and rose 12.1% year-over-year.
-- Written by Andrea Tse in New York
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