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Consumer Confidence Reaches 7-Year High

commercial-upConsumer confidence ticked up for the fourth straight month in August, rising once again to a new seven-year high.

The Conference Board's Consumer Confidence Index climbed 2.1 points to 92.4 in the group's August reading, marking the highest level of confidence since October 2007.

August's increase was driven by an increase in Conference Board's measure of current economic sentiment, which grew to 94.6 from 87.9 in July. Most of that was spurred by more promising reports over the spring and summer as business and labor market indicators improved.

On the other hand, the expectations component of the index slipped, falling one point to 90.9.

"Looking ahead, consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings," said Lynn Franco, director of economic indicators for the Conference Board. "Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market."

Out of those consumers surveyed, the number of those anticipating more jobs in the coming months fell to 17 percent from 18.7 percent in July, though the number of those expecting fewer jobs also dropped to 15.8 percent.

Wage expectations were worse, with only 15.5 percent of respondents saying they expect their income to grow—down from 17.7 percent—and 11.9 percent expecting a drop in their earnings.

Overall, August's report is one to celebrate, says Chris Christopher, director of U.S. consumer economics at IHS Global Insight.

"There has been some good news on the consumer front, such as well received employment reports and falling pump prices, though the current rise in food prices is a downer for many low-income and middle-income households," Christopher said. "[The report] indicates that consumer confidence is maintaining itself at elevated levels and starting to gain traction."

Scheduled later this week is the final August reading of the University of Michigan/Thomson Reuters Index of Consumer Sentiment, which has not fared as well lately. Economists expect Friday's release to show the index climbing to 80.5 after a disappointing first look earlier in the month.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
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