Consumer Confidence: Sharply Better Than Expected, Falling Only Slightly

Bottom Line: Consumer confidence fell only slightly in August, according to the Conference Board's survey, coming in sharply higher than expected. This survey, taken over the entire month of August, suggests the preliminary reading from the Michigan survey, which showed a sharp decline, may have been overly influenced by a sharp swoon in stock prices around the early August Fed rate cut and subsequent trade tariff announcements. The final reading for Michigan will include data collected over the rest of the month and is due Friday -- it will be important to assess consumer attitudes amid increased volatility. Looking through the volatility, the trend in consumer sentiment appears to be mixed for now at overall high levels of confidence, suggesting consumer spending will remain on trend and an important driver of GDP growth. Consumer Confidence FELL by 0.6 points in August to 135.1, compared with market expectations for a decline to 129.0. The index is now 0.3% ABOVE its year ago level. Present Situation Index ROSE by 6.3 points to 177.2. The index is 2.5% ABOVE its year ago level. The Expectations Index FELL by 5.2 points to 107.0. The index is 2.1% BELOW 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 6.3 points to 39.4.