Consumer Confidence Shows Increased Optimism But Concerns Linger

Confidence among consumers across the U.S. has increased slightly in recent months, but some concerns appear to linger, according to a new report.
On Tuesday, the Conference Board, a business research organization, published a report on the current state of consumer confidence showing that the index number “rose in August to 103.3 (1985=100), from an upwardly revised 101.9 in July.”
“The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—improved to 134.4 from 133.1 in July. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—also improved in August to 82.5,” the report said. “As the Expectations Index for July was revised up to 81.1, August marked the second consecutive month of the Index above 80. (A reading below the threshold of 80 usually signals a recession ahead.) The cutoff date for the preliminary results was August 21, 2024.”
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However, the report noted that some concerns about the U.S. economy continue to linger among consumers.
“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,” Dana M. Peterson, chief economist at The Conference Board, said in the report.
Earlier this month, the U.S. Department of Labor reported new data on the current job market which showed that from April to March 2024, the U.S. economy added 818,000 fewer jobs than previously announced.
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According to data released by the Labor Department, job growth averaged around 174,000 per month, in the year ended in March 2023. This figure represents a decline of 68,000 a month from the 242,000 jobs that were previously reported by the Labor Department.
In the report from The Conference Board, Peterson said that August saw consumer confidence declining among those under the age of 35 but increased for those over the age of 35.
“Despite the overall improvement in the headline Index, confidence declined for consumers earning less than $25K. On a six-month moving average basis, consumers earning over $100K remained the most confident. Confidence among consumers earning $15K to $24.9K continued to trend down and was almost as low as for those earning less than $15K,” Peterson said.
According to Peterson, consumers were likely concerned about “the financial market turmoil in early August.”
The elevated cost of essentials also continues to erode Americans’ savings and dampen consumer confidence, even though inflation has eased from its 2022 peak.
This article includes reporting from The Associated Press.