Last Update: 26-Aug-14 10:25 ET
- The Conference Board’s Consumer Confidence Index rose to 92.4 in August from a downwardly revised 90.3 (from 90.9) in July. The Briefing.com consensus expected the index to fall to 88.3.
- That is the strongest reading in the Consumer Confidence Index since it reached 95.2 in October 2007.It was an up-and-down month for equity prices, which brought some confusion about how consumers would view current economic conditions. Early in the month, large equity price declines brought out concerns that the market was on the verge of a big correction. Consumers who focused on those trends were expected to drive confidence lower.
- As it turned out, equity prices rebounded in the second half of the month and, combined with generally improving labor market conditions and lower gasoline costs, helped boost overall confidence levels.
- The Present Conditions Index increased to 94.6 in August from 87.9 in July. The Expectations Index fell to 90.9 from 91.9.
- Growth in consumer confidence does not necessarily lead to consumption growth. Consumption relies on income growth. As long as the labor market strengthens and aggregate income trends higher, consumption growth should follow.
- Income gains are the main catalyst for spending, yet rising levels of confidence over time tend to help on the margin.
|Employment ('plentiful' less 'hard to get')
|1 yr inflation expectations