Although consumer confidence ticked up, the survey from the Conference Board’s survey presented a mixed picture of overall sentiment. Consumers' view of the economy and inflationary pressure improved, but even though their view of current conditions in the labour market remained positive, optimism weakened. Just under one-third of those surveyed expected lower interest rates over the next 12 months.
- The Conference Board reported that its consumer confidence index rose from 101.9 in July to 103.3 in August. Consensus forecasts were for a reading of just over 100. Despite the increase, sentiment remained below what it was prior to the pandemic.
- Consumer inflation expectations for the year ahead fell to 4.9%. This was the lowest level in over four years. Consumers who responded to the survey still highlighted concerns about inflation, even though short-term expectations declined in the fourth quarter of 2024.
- In the short term, consumers revealed more optimism about income and the business backdrop. US consumers’ confidence rose along with the view of current conditions, which increased from 133.1 in July to 134.4 in August.
- Concerns about the job market remained as the proportion of consumers describing jobs as ‘plentiful’ declined slightly to 32.8% in August from 33.4% in July. The percentage of respondents describing jobs as ‘hard to get’ also edged up.
The US labour market added around 800,000 less jobs than first reported in the 12 months from April 2023. The adjustment suggests a slowdown and could factor into the US Federal Reserve Board’s (Fed) interest rate decision in September. The Fed has guided for an interest rate cut but discussions remain over the scale of the cut. Fed Chair Jerome Powell has highlighted rising employment risks alongside easing inflationary pressure.
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