#317785814@Tero Vesalainen|Dreamstime
Consumer Confidence Up a Bit

Consumer Confidence Up a Bit

Aug. 28, 2024
However, consumers expressed mixed feelings, says the Conference Board.

Consumers are feeling slightly optimistic. The Conference Board's Consumer Confidence Index roles from 101.9 in July to 103.3 in August. 

However, Dana M. Peterson, chief economist at The Conference Board, explains in a statement, that this number needs to be understood in context. "Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years. 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.”

Breaking this statistic down in terms of age, she noted that confidence declined among consumers under 35 while it increased for those 35 and older. On a six-month moving average basis, confidence remained the highest among young consumers.

And from an income viewpoint,  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.”

In terms of stock market expectations, she noted that in August, 46.9% of consumers expected stock prices to increase over the year ahead (down from 50.6% in July), while 27.2% expected a decrease (up from 23.1%).  The report also found that consumers did not change their views about a possible recession: the proportion of consumers predicting a recession was stable and well below the 2023 peak. 

With regard to inflation, the average 12-month expectations dropped to 4.9% in August—the lowest since March 2020 and consistent with slower overall inflation and declines in some goods prices. 

Concerning interest rates, 46.5% expect higher rates over the next 12 months. 

As to what consumers are purchasing, home sales fell to a new 12-year low. Car purchases improved slightly. On average, big-ticket appliance purchases were up on average but the increase was driven by only a few items: refrigerator, TV, and washing machine. Plans to buy a smartphone or laptop/PC in the next six months increased again.

Present Situation

Consumers’ assessments of current business conditions were more positive in August.

  • 20.8% of consumers said business conditions were “good,” up from 19.2% in July.
  • 17.7% said business conditions were “bad,” down from 18.2%.

But consumers’ appraisals of the labor market deteriorated in August.

  • 32.8% of consumers said jobs were “plentiful,” down from 33.4% in July.
  • 16.4% of consumers said jobs were “hard to get,” slightly up from 16.3%.

Expectations in Six Months 

Consumers were more optimistic about the business conditions outlook in August.

  • 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%.

Consumers’ assessments of the labor market outlook were slightly less optimistic in August.

  • 16.1% of consumers expected more jobs to be available, up from 15.2% in July.
  • 17.5% anticipated fewer jobs, also up from 16.4%.

Consumers’ assessments of their income prospects were more pessimistic in August.

  • 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%.

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