by However, purchasing plans for homes fell to a 12-year low, representing a likely weak spot for furniture sales
WASHINGTON — Consumer confidence rose slightly in August, mirroring consumers’ improved sentiments about the economy in spite of more pessimistic views of the labor market and earnings potential.
The Conference Board reported that the index rose to 103.3 in August, compared to an upwardly revised 101.9 in July.
Meanwhile, the Present Situation Index, which mirrors consumer views of current business and labor market conditions, rose to 134.4 from 133.1 in July. The Expectations Index, which reflects consumer short-term outlook for income, business and labor market conditions, rose to 82.5 in August, from 81.1 in July, marketing the second straight month that the index was above 80. A reading below 80 signals a looming recession.
Dana Peterson, chief economist at the Conference Board, said that confidence declined among consumers under age 35 and rose for those 35 and older. Meanwhile, on a six-month average basis, confidence remained the highest among young consumers, yet declined for those earning less than $25,000. On a six-month average basis, consumers earning more than $100,000 were the most confident.
“Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,” Peterson said. “Consumers continued to express mixed feelings in August. Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market. Consumers’ assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic. This likely reflects the recent increase in unemployment. Consumers were also a bit less positive about future income.”
Also, confidence was low among consumers earning from $15,000 to $24,900 and was almost as low as for those earning less than $15,000, Peterson noted.
In a dour note for the furniture industry, purchasing plans for homes in the coming months fell to a new 12-year low. This is in spite of the share of consumers anticipating higher interest rates over the next 12 months dropping for the third consecutive month to 46.5%, the lowest since February. The Conference Board also noted that 31.5% of those surveyed expect lower rates, which was the highest percentage since April 2020.
Average 12-month expectations regarding inflation fell to 4.9% in August, which the Conference Board said was the lowest since March 2020 and “consistent with slower overall inflation and declines in some goods prices.” However, it noted that prices and inflation were the top subject of write-in responses.
Other highlights of the report were as follows:
Of their present situation:
+ 20.8 of consumers said business conditions were good, up from 19.2% in July.
+ 17.7% said that business conditions were bad, down from 18.2% in July.
Of the labor market:
+ 32.8% of consumers said jobs were plentiful, down from 33.4% in July.
+ 16.4% of consumers said jobs were hard to get, up from 16.3% in July.
Of expectations six months from now:
+ 18.4% of consumers expected business conditions to improve, up from 15.2% in July.
+ 15.6% expected business conditions to worsen, down from 16.2% in July.
Of the labor market:
+ 16.1% of consumers expected more jobs to be available, up from 15.2% in July.
+ 17.5% of consumers anticipated fewer jobs, up from 16.4%.
And of their income prospects:
+ 16.9% of consumers expected their incomes to increase, down from 17.2% in July.
+ 12.7% expected their incomes to decrease, up from 11.6%.
