The American economy is getting better and should get better still in the months to come, with that fact driven home nicely in the past hour when the Conference Board, a New York-based research organization, reported that its survey on consumer confidence had jumped ahead in August to a reading of 92.4. Forecasts had been for a slight dip from July's downwardly adjusted result of 90.3. Initially, the July metric had been estimated at 90.9.
Not only did the aggregate number rise to 92.4, but there was an improvement in one of the two major components, specifically the Present Situations Index, which increased 87.9 in July to 94.6 in August. On the other hand, the Expectations Index, normally a more bullish component, actually eased a little, edging down from 91.9 last month to 90.9 in August. However, this number is high enough that the slight diminution is not especially worrisome.
The monthly Consumer Confidence Survey, meanwhile, is based on a probability-design random sample. The cutoff date for these preliminary results was August 14th. A revision to this survey will be made on the last Tuesday in September.
According to Lynn Franco, the Conference Board's Director of Economic Indicators, "Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers' spirits." She also intoned that while consumers were a little less optimistic about the short-term outlook due to concerns about their earning power, they remain quite positive about the economy and the labor market, as a whole.
Meanwhile, those saying that jobs were plentiful increased last month, while consumers noting that jobs were more difficult to attain eased back somewhat in August. They also observed that the overall feeling was that business conditions were improving for most Americans.
On the whole, this was a solid report and one that is consistent with the tenor of the business outlook nationwide. Our sense is that the better stock market, albeit not a direct factor in the survey, has improved the mood of many Americans, which is clearly reflected in the high reading on confidence seen in recent months.