U.S. consumer confidence rose sharply this month, hitting its highest level since January, according to data from The Conference Board. The research group’s Consumer Confidence Index increased to 101.5 in August, soaring past estimates. Most economists expected a reading of around 93.5, following July’s 91 figure.
“Consumers’ assessment of current conditions was considerably more upbeat, primarily due to a more favorable appraisal of the labor market,” said Lynn Franco, director of economic indicators at The Conference Board. “The uncertainty expressed last month about the short-term outlook has dissipated and consumers are once again feeling optimistic about the near future. Income expectations, however, were little improved.”
The Conference Board’s Present Situation Index jumped to 115.1 in August, the best reading since November of 2007. The Index of Consumer Expectations for the next six months spiked more than 10 points, hitting 92.5. Measures meant to show Americans’ feelings about the labor market also improved, as survey respondents who said jobs “were plentiful” climbed to the highest level since January of 2008. While people believe the job market is getting better, they remain pessimistic about wages, though. The share of Americans expecting an increase in their incomes dropped this month to the lowest level this year.
Analysts note that the data for the Conference Board’s report was collected before the recent stock market rout, suggesting consumer sentiment might slip in the next round of surveys. More related data will be available tomorrow when the University of Michigan Consumer Sentiment Index is released.