Last Update: 28-Aug-15 18:14 ET
- The Conference Board’s Consumer Confidence Index increased to 101.5 in August from an upwardly revised 91.0 (from 90.9) in July. The Briefing.com Consensus expected the Consumer Confidence Index to increase to 93.1.
- The jump in confidence in August wiped away all of the discomfort from July and returned levels above where they were in June (99.8). In fact, this was the strongest confidence reading since January 2015.
- The gain in confidence was likely the result of improvements in labor market conditions – as shown by historically low initial claims filings – and lower gasoline prices. Uneven stock trends, which likely dampened the preliminary August reading from the University of Michigan Consumer Sentiment Index, did not seem to make much of an impact on these sentiment levels.
- The Present Situation Index increased to 115.1 in August from 104.0 in July. The Expectations Index rose to 92.5 from 82.3.
- The improvements in confidence are unlikely to have much of an impact on consumption trends. Consumption relies on income growth, not confidence. As long as the labor market continues to improve and income rises, consumption trends are likely to follow.
- Consumer sentiment has little influence on consumption. As long as payroll levels continue to expand, the resulting income growth should keep consumption gains steady regardless of the monthly ebbs and flows in sentiment.
|Employment ('plentiful' less 'hard to get')
|1 yr inflation expectations