Consumer confidence increased to its highest level in nearly a year, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch.
The Consumer Confidence Index increased to 101.1 in August, up from 96.7 in July. The Present Situation Index increased from 118.8 to 123, and the Expectations Index increased from 82 in July to 86.4 in August.
In 1985, the index was set to 100, representing the index's benchmark. This value is adjusted monthly based on results of a household survey of consumers' opinions on current conditions and future economic expectations. Opinions on current conditions make up 40% of the index, while expectations of future conditions make up 60%.
“Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July,” said Lynn Franco, The Conference Board director of economic indicators.
“Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month,” Franco said. “Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months.”
Consumer who said their current economic conditions are good increased from 27.3% to 30% in August and those saying their conditions are bad remained unchanged at 18.4%.
Consumers also had a more favorable view of the labor market. Those saying jobs are more plentiful (they are, in some industries) increased from 23% to 26%, but those saying jobs are hard to get also rose from 22.1% to 23.4%.
Optimism about the short term also picked up in August as consumers who said they expected business conditions to improve in the next six months increased form 15.7% last month to 17.3%. Those who expected business conditions to get worse decreased from 12.4% to 11.1%.
Those expect jobs to continue to improve in the coming months increased from 13.5% to 14.2%, however those who say it will remain the same held steady at17.5%. Those who expect their incomes to increase in the coming months increased from 17.1% to 18.8% whereas those who are expecting a decline in pay decreased from 11% to 10.7%.