U.S. Consumer Confidence Jumps To Highest Level In Almost A Year

After reporting a marginal decline in U.S. consumer confidence in the previous month, the Conference Board released a report on Tuesday showing that consumer confidence rebounded strongly in the month of August.

The Conference Board said its consumer confidence index jumped to 101.1 in August from a downwardly revised 96.7 in July.

Economists had expected the index to come in unchanged compared to the 97.3 originally reported for the previous month.

With the substantial increase, the consumer confidence index reached its highest level since September of last year.

"Consumers' assessment of both current business and labor market conditions was considerably more favorable than last month," said Lynn Franco, Director of Economic Indicators at the Conference Board.

She added, "Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months."

Reflecting the improved assessment of current conditions, the present situation index climbed to 123.0 in August from 118.8 in July.

The report said consumers calling business conditions "good" increased to 30.0 percent from 27.3 percent, while those saying business conditions are "bad" remained virtually unchanged at 18.4 percent.

Consumers' assessment of the labor market was also more favorable, with those claiming jobs were more "plentiful" rising to 26.0 percent from 23.0 percent, although those saying jobs are "hard to get" also rose to 23.4 percent from 22.1 percent.

The Conference Board said the expectations index also improved to 86.4 in August from 82.0 in July, as consumer optimism regarding the short-term outlook picked up.

The percentage of consumers expecting business conditions to improve over the next six months rose to 17.3 percent from 15.7 percent, and those expecting business conditions to worsen fell to 11.1 percent from 12.4 percent.

Additionally, consumers expecting more jobs in the months ahead edged up to 14.2 percent from 13.5 percent, while those anticipating fewer jobs remained virtually unchanged at 17.5 percent.

The University of Michigan released a separate report last Friday that unexpectedly showed a slight decline in consumer sentiment in August.

The report said the final reading on the consumer sentiment index for August came in at 89.8 compared to the initial estimate of 90.4. With the downward revision, the consumer sentiment index for August was below the final July reading of 90.0.

The downward revision came as a surprise to economists, who had expected the index to be upwardly revised to a reading of 90.7.