Consumer confidence in August highest in 11 months
U.S. consumer confidence rose in August to its highest level in 11 months, suggesting economic growth could pick up in the second half of the year.
The Conference Board said Tuesday that its consumer confidence index rose to 101.1, up from 96.7 in July.
It was the highest level for confidence since the index hit 102.6 last September.
The gain reflected consumers’ brighter views about current the economic situation and their expectations for the future.
The percentage of those surveyed who saw business conditions as “good” increased from 27.3 percent to 30 percent. Those who viewed business conditions as “bad” remained virtually unchanged at 18.4 percent.
Consumers who regarded jobs as “plentiful” increased from 23 percent to 26 percent, although those who felt jobs were “hard to get” also rose slightly from 22.1 percent to 23.4 percent.
Economists said that the climb in confidence reflected stronger job gains seen in recent months, as well as strength in the stock market and home prices, which boost consumers’ net worth.
They expect the momentum in jobs to boost incomes and spur stronger consumer spending. That should help growth accelerate in the second half of this year, after four quarters of an anemic average growth rate of 1.2 percent. Many analysts believe gross domestic product will top 3 percent in the current quarter.
“Growth will be supported by consumer confidence and job growth,” Jennifer Lee, senior economist at BMO Capital Markets, said in reaction to the consumer confidence report.
The government will release the August jobs report on Friday. Many economists are looking for a gain of around 180,000 jobs.