WASHINGTON (8/26/15)--Consumer sentiment plowed past analysts’ expectations in August with a 10.5-point surge, according to the Conference Board’s monthly consumer confidence index (Economy.com Aug. 25).
Encouraged by a healthier labor market, the present conditions subindex recorded an 11.1-point jump to 115.1, the highest mark since November 2007, while the future conditions segment rose 1.2 points to 92.5.
“Shoppers are feeling more optimistic about their current finances than they have since before the recession, and expectations rebounded after a surprise dip in July,” said Nate Kelley, Moody’s analyst (Economy.com). “A larger share of those surveyed noted a stronger job market, and more respondents say they think there will be more jobs available six months from now.”
The share of respondents who believe jobs are currently “plentiful” gained 2 percentage points in August to 21.9%, while the share of those who believe jobs are “hard to get” dropped by 6.5% to 21.9%.
Additionally, 14.6% said there will be more jobs available six months from now, nearly a 1% increase, while 13.6% said fewer jobs will be available, a 5.4% drop from July’s number.
Despite the uptick in consumer confidence, however, shoppers largely have kept a lid on spending.
Only 10.6% plan to buy a car in the next six months, a 1.2% drop from July and the smallest share since April 2014.
And only 4.1% have plans to purchase a home, down from 5.9% and the lowest share since August 2011.
“Fewer shoppers think they will get a raise during (the next six months), which may be a possible reason why purchasing plans faltered in August,” Kelley said.