U.S. consumer sentiment index rises sharply in August

Consumer sentiment in the U.S. rises sharply in August. The Conference Board’s consumer confidence index rose from July’s 127.9 to 133.4 in August. This is the highest since October 2000, and exceeded consensus expectations.

The rise in sentiment was widespread throughout the present situation and expectations indices. Consumers have continued to stay positive regarding the present situation since April, but seem to have some doubts regarding future conditions, as reflected in the fall in expectations since June. Nevertheless, today’s report indicates towards overall optimism among consumers.

Looking at the details, the present situation index rose to 172.2 in August. More consumers saw business conditions as being ‘good’ and fewer saw conditions as ‘bad’. The assessment of current labor market conditions was also favourable, as fewer saw employment as ‘hard to get’.

In terms of the short-term outlook, the expectations index rebounded to 107.6. Those expecting a rebound in business conditions in the next six months rose to 24.3 percent and the number of consumers expecting a rise in income in the next six months also rose. The outlook for employment was more mixed, as those expecting ‘more jobs’ dropped, as did those expecting ‘fewer jobs’.

“Compared to the July report, today’s report suggests a decline in uncertainty in consumers’ perceptions of the near-term economic outlook. Consistent with this, more consumers reported plans of buying a house or major appliances in the coming months”, stated Barclays.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at 1.62006. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex