Consumer Confidence Exceeds Expectations

As goes the consumer so goes the U.S. economy. And the news has been mostly good and includes a nearly 4-1/2 point jump in the consumer confidence index to a 101.1 level for August that easily exceeds Econoday's high estimate. Both the expectations and present situation components posted gains in the month though the latter does show a sizable and unwanted 1.3 percentage point increase in those describing jobs as hard to get. But signals on jobs are mixed with other readings positive including a gain for those who see more jobs opening up in the months ahead. Another positive is a widening in those who see their incomes improving which boils down to confidence in the jobs market. Buying plans include a jump for homes in what is the latest good news for the housing sector. Weakness in inflation expectations is a concern though the reading did tick up 1 tenth to a 4.8 percent level that for this report, however, is very low. But this report in sum is definitely a positive for the economic outlook and ultimately reflects the strength of the labor market. Another positive employment report on Friday would point to extended strength for all consumer readings.

Recent History Of This Indicator:
The Conference Board's consumer confidence index jumped 5 points in June and then held steady in July, dipping only slightly to 97.3. The jobs-hard-to-get reading fell sharply to accurately foreshadow the solid strength of the July employment report. Neither Brexit nor the presidential election have to yet to have a major impact on confidence. A negative has been the report's reading on inflation expectations which has been very low. Forecasters see the confidence index unchanged in August at 97.3.