A report released by the Conference Board on Tuesday showed an unexpected improvement in U.S. consumer confidence in the month of August.
The Conference Board said its consumer confidence index surged up to 133.4 (compared with 126.6 expected) in August from an upwardly revised 127.9 in July. Economists had expected the index to dip to 126.8 from the 127.4 originally reported for the previous month.
With the unexpected increase, the consumer confidence index reached its highest level since hitting 135.8 in October of 2000.
“Overall, these historically high confidence levels should continue to support healthy consumer spending in the near-term,” said Lynn Franco, Director of Economic Indicators at the Conference Board.
Franco noted consumers’ assessment of current business and labor market conditions continued to improve, with the present situation index jumping to 172.2 in August from 166.1 in July.
The percentage of consumers saying business conditions are “good” increased to 40.3 percent from 38.1 percent, while those saying conditions are “bad” dipped to 9.1 percent from 10.3 percent.
While the report also said consumers claiming jobs are “plentiful” was virtually unchanged at 42.7 percent, those claiming jobs are “hard to get” dropped to 12.7 percent from 14.8 percent.
“Expectations, which had declined in June and July, bounced back in August and continue to suggest solid economic growth for the remainder of 2018,” Franco added.
The Conference Board said the expectations index rebounded to 107.6 in August after falling to 102.4 in the previous month.
Consumers anticipating business conditions will improve over the next six months rose to 24.3 percent from 22.9 percent, although those expecting business conditions will worsen also inched up to 10.5 percent from 10.3 percent.
Meanwhile, the report said the outlook for the labor market was mixed, with consumers expecting more jobs in the months ahead slipping to 21.7 percent from 22.6 percent, while those anticipating fewer jobs also edged down to 14.1 percent from 15.2 percent.
The University of Michigan is scheduled to release its final report on consumer sentiment in the month of August on Friday.
The consumer sentiment index for August is expected to be upwardly revised to 95.9 from the preliminary reading of 95.3, which was down from 97.9 in July.
Why Markets Care About Conference Board Consumer Confidence Index (CCI)
The Conference Board (CB) publishes the Consumer Confidence Index (CCI), at 10 a.m. ET on the last Tuesday of every month.
It measures Level of a composite index based on surveyed household.
The usual effect is that ‘Actual’ greater than ‘Forecast’ is good for the dollar and vice versa.
The Consumer Confidence Index is derived a survey of about 5,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation. The Consumer Confidence Survey reflects prevailing business conditions and likely developments for the months ahead. This monthly report details consumer attitudes and buying intentions, with data available by age, income, and region.
The Conference Board Consumer Confidence Index (CCI) is a barometer of the health of the U.S. economy from the perspective of the consumer. The index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income. The Consumer Confidence Index and its related series are among the earliest sets of economic indicators available each month and are closely watched as leading indicators for the U.S. economy.
Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity
Other Economy News – Advance Economic Indicators Report
The U.S. Census Bureau today announced the following international trade, wholesale inventories, and retail inventories advance statistics for July 2018
Advance International Trade in Goods
The international trade deficit was $72.2 billion in July, up $4.3 billion from $67.9 billion in June. Exports of goods for July were $140.0 billion, $2.5 billion less than June exports. Imports of goods for July were $212.2 billion, $1.8 billion more than June imports.
Advance Wholesale Inventories
Wholesale inventories for July, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $637.0 billion, up 0.7 percent (±0.2 percent) from June 2018, and were up 5.2 percent (±3.9 percent) from July 2017. The May 2018 to June 2018 percentage change was unrevised from the preliminary estimate of up 0.1 percent (±0.2 percent).
Advance Retail Inventories
Retail inventories for July, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $637.7 billion, up 0.4 percent (±0.2 percent) from June 2018, and were up 2.3 percent (±1.6 percent) from July 2017. The May 2018 to June 2018 percentage change was revised from up 0.1 percent (±0.2 percent)* to virtually unchanged (±0.2 percent)*.