United States: Consumer confidence ebbs slightly in August but remains elevated
The Conference Board’s consumer confidence index ticked down to 135.1 in August following July’s revised rebound to 135.8 (previously reported: 135.7). Nonetheless, the print overshot market expectations of 130.0 and the index remains comfortably above the 100-point threshold that separates consumer optimism from pessimism.
The slight downturn in August was chiefly driven by households’ mildly less upbeat assessment of the short-term outlook. Consumers were somewhat less optimistic about the business climate as well as the labor market, with more consumers anticipating fewer jobs in the months ahead. Regarding personal finances, the percentage of respondents expecting their income prospects to improve declined; however, those expecting a drop in income also decreased.
On a brighter note, consumers had a more positive view of current conditions in August: They were more optimistic about both business conditions as well as the job market. The labor differential—the difference between the percentage of respondents who state that jobs are plentiful and those who say that jobs are hard to get—rose from 33.1 in July to 39.4 in August.
Commenting on this month’s reading, Lynn Franco, senior director of economic indicators at The Conference Board, noted:
“The Present Situation Index is now at its highest level in nearly 19 years […] While other parts of the economy may show some weakening, consumers have remained confident and willing to spend. However, if the recent escalation in trade and tariff tensions persists, it could potentially dampen consumers’ optimism regarding the short-term economic outlook.”