Consumer Confidence: Another Unexpected Increase

Bottom Line: Consumer confidence jumped sharply in August, surprising estimates to the upside and running counter to the modest declines seen in initial reports on consumer sentiment from the University of Michigan. We should note that this survey was taken through August 17th, prior to the latest troubles for President Trump on August 21st. Still, despite the political headlines throughout August, gains in the stock market, home prices, and jobs and tax cuts are boosting household wealth and thus, confidence. The present conditions index hit record highs for this cycle and is approaching levels not seen since the turn of the century. Consumer Confidence ROSE by 5.5 points in August to 133.4, compared with market expectations for a decline to 126.6. The index is now 10.8% ABOVE its year ago level. Present Situation Index ROSE by 6.1 points to 172.2. The index is 16.0% ABOVE its year ago level. The Expectations Index ROSE by 5.2 points to 107.6. The index is 5.8% ABOVE its year ago level. The labor differential, the percentage of respondents who said jobs are “hard to get” from the percentage who said jobs are “plentiful” , moved higher by 2.0 points to 30.0.