US Consumer Reports Show Improvement but the Dollar Slides
Consumer reports were showing stagnation in confidence for the US consumer for several months, but the latest figures are showing improvement. Today’s conference Board Consumer Confidence Indicator showed a jump for August and July’s number was revised higher as well, which shows that there will be no recession. However, markets are convinced that the FED will embark on a rate cut journey in September, which is keeping the USD really soft.
The Conference Board reported that US consumer confidence rose to 103.3 points in August, surpassing expectations of 100.7 points. The Present Situation Index, which measures consumers’ assessment of current business and labor market conditions, improved to 134.4 points from 133.1 points previously. The Expectations Index, which gauges consumers’ outlook for income, business, and labor market conditions, also saw a slight increase, rising to 82.5 points from 81.1 points.
The increase in consumer confidence suggests a growing optimism about economic conditions, despite ongoing concerns about the job market. The lower inflation expectations indicate that consumers may be feeling less pressure from rising prices, which could support further improvements in confidence and spending. However, the divide in sentiment between younger and older consumers highlights ongoing uncertainties in the economy.
US Consumer Confidence from The Conference Board for August 2024
- US Consumer Confidence: Rose to 103.3 points in August, above the expected 100.7 points.
- Present Situation Index: Increased to 134.4 points, up from 133.1 points prior.
- Expectations Index: Improved to 82.5 points, from 81.1 points previously.
- Job Market Perception: 16.4% of consumers said jobs were “hard to get,” slightly up from 16.0%.
- 12-Month Inflation Expectations: Dropped to 4.9%, the lowest since March 2020, down from 5.4% prior.
- Consumer Confidence by Age: Declined among those under 35, increased for those 35 and older.
Overall consumer confidence rose in August, but it remained within the narrow range that has been observed over the past two years, as noted by officials from the Conference Board. In August, consumer sentiment remained mixed. Compared to July, there was increased optimism about current and future business conditions, but growing concern about the employment outlook.
While views on the current labor market were still favorable, they showed signs of decline, and expectations for future job opportunities turned more pessimistic, likely due to the recent uptick in unemployment rates. Additionally, consumers were less hopeful about future income prospects.
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