Consumer confidence surged to a 12-month high in August as strong job gains and low gasoline prices more than offset uncertainty over the presidential election and weak economic growth.
The Conference Board’s index of Americans’ views of the economy and labor market rose to 101.1 from a downwardly revised 96.7 in July as their assessment of current conditions and their six-month outlook both improved. Economists surveyed by Bloomberg expected a dip.
Monthly job growth averaged 273,000 in June and July, bouncing back resoundingly from a two-month slump. Meanwhile gasoline prices have edged up this year but remain low, with unleaded regular at $2.21 a gallon, according to AAA. And while stocks have been volatile, they’re hovering near all-time highs.
In August, 30% of those surveyed said business conditions are “good,” up from 27.3%. And 26% said jobs were “plentiful,” compared to 23% in July.
Their short-term outlook also brightened, with the share expecting business conditions to improve rising to 17.3% from 15.7%. And 14.2% expect more jobs over the next six months, up from 13.5%, while 18.8% believe their incomes will increase, up from 17.1%.
The housing market could benefit from the stepped-up optimism. as 6.4% of Americans plan to buy a home in the next six months, the highest level since January. About half intend to buy an appliance, the most since May. But the portion planning to buy a car fell to a 10-month low of 11%.
Consumer confidence can serve as a signal of future household spending, which makes up 70% of economic activity.
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