The U.S. Conference Board’s index of consumer sentiment dropped just slightly to 135.1 in August from July’s 135.8. Consensus expectations were for the sentiment to fall to 129.
The present situations index rose to the highest level in almost 19 years, to 177.2, and helped counter the fall in consumer expectations. Consumers’ assessments of present employment and business conditions rebounded in August. The labor differential index, which shows the percentage of respondents who view jobs as ”plentiful” less those who view them as “hard to get” rose to 39.4, the highest since the end of 2000. Solid labor markets and associated wage gains have helped cushion consumer sentiment against uncertainties.
The expectations index that represents consumers’ short-term outlook dropped in August, falling to 107 from 112.4. This was due to downgrades to consumers’ assessments of business conditions and, to some extent, employment expectations and likely reflects the recent escalation in trade policy uncertainty, noted Barclays in a research report. Meanwhile, income expectations stayed strong, and a fewer share of respondents expect a fall in income levels.
“In all, we view consumer confidence as remaining on a strong footing and supportive of solid consumption spending in the months ahead”, added Barclays.
