Consumer confidence rose slightly in August — RISMedia

The Conference Board's consumer confidence index, which measures Americans' opinion of the current economic situation and its outlook for the next six months, rose in August from 101.9 in July (upwardly revised). The current situation index, which is based on consumers' assessment of current business and labor market conditions, improved to 134.4 from 133.1.

The expectations index, which is based on consumers' short-term income, business and labor market forecasts, also improved to 82.5 in August.

“Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at The Conference Board. “Consumers continued to express mixed feelings in August. Compared with July, they were more positive about current and future business conditions, but also more concerned about the labor market. Consumers' assessments of the current labor market situation, while still positive, continued to weaken, and assessments of future labor market developments were more pessimistic. This likely reflects the recent rise in unemployment. Consumers were also somewhat less optimistic about their future income.”

Consumers' assessments of their family's current financial situation were less positive, but they were more optimistic about the next six months.

“In August, confidence among consumers under 35 declined, while it increased among those over 35,” Peterson noted. “On the six-month moving average, confidence remained highest among young consumers. Despite the overall improvement in the index, confidence declined among consumers earning less than $25,000. On the six-month moving average, consumers earning over $100,000 remained the most confident. Confidence among consumers earning $15,000 to $24,900 continued to decline, nearly as low as those earning less than $15,000.

“Consumers were likely unsettled by the turmoil in financial markets in early August, as they were less optimistic about the stock market,” she added. “In August, 46.9% of consumers expected stock prices to rise in the coming year (up from 50.6% in July), while 27.2% expected a decline (up from 23.1%). August written responses also increased mention of stock prices and unemployment influencing consumers' views of the U.S. economy. However, consumers have not changed their views on a potential recession: the share of consumers predicting a recession remained stable and well below the 2023 peak.”

Average inflation expectations for the next 12 months fell to 4.9% in August, the lowest since March 2020 and consistent with slower inflation overall and declines in some commodity prices. Still, mentions of prices and inflation outpaced written responses. At the same time, the share of consumers expecting higher interest rates over the next 12 months fell for the third month in a row to 46.5% – the lowest since February 2024. The share expecting lower interest rates rose to 31.5%, the highest since April 2020.

Based on a six-month moving average, home purchase plans fell to a new 12-year low, while car purchase plans improved slightly. Purchase plans for expensive household appliances rose on average, but the increase was driven by only a few items: refrigerator, television and washing machine. Plans to buy a smartphone or laptop/PC in the next six months increased again.