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U.S. Consumer Confidence Rose in August After Three Months of Decline

U.S. consumer confidence ticked up in August after three months of consecutive declines.

The Conference Board found that its consumer confidence index was at 103.2 in August, up from 95.3 in July. This was ahead of expectations of 97.7 predicted by economists polled by Reuters. Overall, consumers’ assessment of current business and labor market conditions and their short-term outlook for income, business, and labor market conditions increased as well.

Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement that consumers’ assessment of current business and labor market conditions — or “The Present Situation Index” — recorded an uptick for the first time since March.

“Concerns about inflation continued their retreat but remained elevated,” Franco said. “Meanwhile, purchasing intentions increased after a July pullback, and vacation intentions reached an eight-month high. Looking ahead, August’s improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term.”

Consumer prices, while up 8.5% in July from a year ago, have begun to show signs of cooling from a 40-year high of 9.1% in June. Energy prices fell 4.6% in July, while gasoline prices dipped 7.7%. This was offset by a 1.1% monthly gain in food prices and a 0.5% increase in shelter costs.Amid the high prices, retail sales growth has remained relatively stable. July retail sales totaled $682.8 billion, according to a monthly report from the U.S. Census Bureau. This marked little change from the numbers in June, which were amended to reflect $682.6 billion. However, sales were up 10.3% compared with July 2021.

In the short term, consumers expressed that they were more confident about business conditions, the labor market and financial prospects.

In an assessment of current situations, consumers were mixed on their perception of the labor market, with 48% saying jobs were plentiful, down from 49.2%. 11.4% described jobs as “hard to get,” down from 12.4%. And 19.2% of consumers described business conditions as “good,” up from 16.3%. 23.2% of consumers described business conditions as “bad,” down from 24.2%.

With a July unemployment rate of 3.5%, or 5.7 million people unemployed, the number of job openings (11.2 million as of the last business day of July) is still outnumbering available workers by an almost 2-to-1 ratio, a sign that the tight labor market persists.

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