- Consumer confidence forecast to decline but remain buoyant in August
- Labor market strength continues to support consumer optimism
- Trade conflicts and tariffs have yet to damage consumer sentiment
The Conference Board, a private business group will release its August Consumer Confidence Index on August 27th at 14:00 GMT 10:00 EDT.
The Consumer Confidence Index is expected to drop to 129.5 in August from 135.7 in July. The Present Situation Index was 170.9 in July up from 164.3 in June. The Expectations Index was 112.2 in July and 97.6 in June.
US Labor Market
The two year boom in the labor market continues to pay dividends in consumer sentiment. Job creation, ease of new employment and wages are the most important factors in consumer attitudes and they remain markedly positive.
Though the three month moving average for non-farm payrolls has fallen from 235,000 in January to 187,000 in July it is still well above the monthly new labor force entrants of 125,000 to 150,000. The surplus of jobs over workers will keep the rising wages that the Federal Reserve is keen to maintain flowing to workers.
The 3.7% unemployment rate and 214,000 4-week moving average for initial claims argue that despite the slide in business sentiment employers are still responding to the US economy as it is rather than enacting their own trade based concerns.
For the consumer annual wage gains of 3.2%, within 0.2% of the highest in a decade is the best proof that the labor market delivers for the US worker.
The post-financial crash expansion became the longest in US history in July. The spurt in job creation and wages of the last two years after a decade of growth have brought prosperity to many groups on the margins of the economy. These communities many of which had seen their livelihood decimated by the export of manufacturing jobs over the past generation have new cause for hope.
There is little suspense that consumer confidence measures report this economic reality with some of the highest reading in decades. The reports of the Conference Board are stable at levels of overall confidence, current satisfaction and expectations scored only twice before in the 52 year history of the survey.
Pace to American novelist William Faulkner who said, “One of the saddest things is that the only thing a man can do for eight hours a day, day after day, is work.” If those working hours working provide wages that let the consumer improve their lives the other 16 hours of the day that will continue to be reflected in measures of happiness and hope.
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