U.S. consumer confidence hits seven-year high

08/29/2014

U.S. consumer confidence hits seven-year high

NEW YORK – Aug. 26, 2014 – U.S. consumers continue to feel better about the economy as the Conference Board Consumer Confidence Index hits 92.4 – its fourth consecutive monthly increase and the highest level in almost seven years.

In July, the Index stood at 90.3. The Present Situation Index that gauges attitudes about today increased to 94.6 from 87.9. However, the Expectations Index, which gauges attitudes about the future, edged down slightly to 90.9 from July's 91.9.

"Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers' spirits," says Lynn Franco, director of economic indicators at The Conference Board.

"Looking ahead, consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings," she adds. "Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market."

Current conditions

Consumers saying business conditions are "good" edged up to 23.9 percent from 23.3 percent, while those claiming business conditions are "bad" declined to 21.5 percent from 22.8 percent.

Consumers' assessment of the job market was also more positive. Those stating jobs are "plentiful" increased to 18.2 percent from 15.6 percent, while those claiming jobs are "hard to get" declined marginally to 30.6 percent from 30.9 percent.

Short-term economic outlook

The percentage of consumers who expect business conditions to improve over the next six months held steady at 20.4 percent, while those expecting business conditions to worsen fell to 10.2 percent from 12.1 percent.

Consumers, however, were somewhat mixed about the outlook for the labor market. Those anticipating more jobs in the months ahead fell to 17.0 percent from 18.7 percent, although those anticipating fewer jobs also declined to 15.8 percent from 16.6 percent.

Fewer consumers expect their incomes to grow: 15.5 percent in August versus 17.7 percent in July. Those expecting a drop in their income rose marginally to 11.9 percent from 11.1 percent.

Consumer confidence hit a low of 25.3 in February 2009. In the 20 years before the recession, however, it averaged 102.

Nielsen conducts the monthly Consumer Confidence Survey, based on a probability-design random sample, for The Conference Board. The cutoff date for the preliminary results was Aug. 14.

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