Consumer confidence at an almost 12-month high
Posted September 1, 2016
August’s consumers are buoyed by a sense of optimism, a survey released Tuesday showed.
The latest consumer confidence index rose to 101.1, its highest level since September 2015 and exceeding Wall Street expectations, MarketWatch reported.
Consumers who saw the number of available jobs as “plentiful” increased from 23 to 26 percent, Yahoo reported, although the percentage who felt jobs were hard to find rose from 22.1 to 23.4 percent. A greater share of consumers are expecting incomes to increase, while fewer are expecting it to decline, according to Reuters.
"This will likely be interpreted as more evidence that the U.S. economic recovery is back on track following the missteps earlier this year," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.
But what consumers expect in six months is less optimistic, MarketWatch noted.
This continuing disquiet may be adding to “somewhat slower U.S. growth despite steady job gains, low unemployment, slightly higher wages and rising home sales,” the website said.
But there may be “the possibility of a moderate pickup in growth in the coming months,” said Lynn Franco, director of economic indicators at the Conference Board, which conducts the survey. The economy does seems to be stronger “after a bout of weakness earlier in the year.”
“Consumer confidence can serve as a signal of future household spending, which makes up 70 percent of economic activity,” USA Today reported.
This optimism could benefit the housing market, USA Today noted, as 6.4 percent of Americans expect to buy a home within the next six months, the highest level since January.
Consumers interested in buying an appliance also rose to half, the highest since May, according to USA Today. But those thinking of buying a car dropped to a 10-month low of 11 percent.
The latest consumer confidence report added to “strong data on consumer spending, residential construction, durable goods orders and industrial production that have suggested an acceleration in economic growth,” Reuters stated. This “steady stream of bullish economic reports” could give the Federal Reserve reason to raise interest rates, it continued.
"Growth will be supported by consumer confidence and job growth," Jennifer Lee, senior economist at BMO Capital Markets, told Yahoo.
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