Recent Updates

  • Japan: Wholesale & Retail Trade (Oct-Prelim), Labor Force Survey, Lease Statistics (Oct)
  • Vietnam: Industrial Production (Nov)
  • Japan Regional: Labor Force Survey by Prefecture (Q3)
  • more updates...

Economy in Brief

U.S. Consumer Confidence Rises in August for the First Time Since April
by Winnie Tapasanun  August 30, 2022

• Up 7.9 pts. to higher-than-expected 103.2 in August; the first m/m rise following three straight m/m drops.

• Present Situation Index at 145.4, the first m/m gain since March.

• Expectations Index at 75.1, the first m/m rise to the highest level since April, but still below 80, suggesting continued recession risks.

• Consumers generally less optimistic about the present labor market but more optimistic about the short-term labor market outlook.

• Inflation expectations, while continuing their retreat, remain elevated.

The Conference Board U.S. Consumer Confidence Index rebounded 8.3% (-10.4% y/y) to 103.2 in August after a 3.2% decline to 95.3 in July (-2.7%; 95.7 initially). The August reading registered the first monthly gain since April’s 0.9% and matched May’s index level, but it was still below 115.2 last August. A reading of 97.4 had been expected in the Action Economics Forecast Survey.

Consumers' views of present and future economic conditions improved this month. The Present Situation Index rose 4.1% (-2.4% y/y) to 145.4 in August, the first m/m rise since March, after a 5.1% drop to 139.7 in July. However, the index was slightly lower than 148.9 last August. The Expectations Index jumped 14.5% (-19.1% y/y) to 75.1 this month, the first monthly advance to the highest level since April, after a 0.3% decline to a nine-year-low 65.6 in July. It was down 32.9% since the recent peak of 111.9 in March 2021 and well below 92.8 last August.

Labor market readings generally showed less optimism this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, fell to 36.6% in August, the fourth monthly fall in five months to the lowest reading since April 2021, from 36.8% in July. It was below the record 47.1% in March and 44.4% last August. Calculated by Haver Analytics, this series has had a 68% correlation with the unemployment rate over the last ten years. The jobs plentiful measure slid to 48.0% this month, the seventh m/m slide in eight months to the lowest reading since April 2021, from 49.2% in July. It was below the record 56.7% in March and 55.6% last August. The jobs hard-to-get measure eased to 11.4% of respondents in August from 12.4% in July, but it was up from an expansion low of 9.6% in March and 11.2% last August.

Consumers viewed business conditions as more favorable compared to last month. Current business conditions were perceived as good by 19.2% of respondents in August, up from 16.3% in July but down from 20.2% last August. Expectations that business conditions would improve in six months were 17.5% of respondents, up from 13.7% in July but down from 23.4% last August and the record 42.5% in May 2020. More jobs were expected in six months by 17.4% of respondents, up from 15.1% in July but down from 23.1% last August and a 41.2% high in April 2020. The percentage expecting rising income increased to 15.8% of respondents in August from 15.3% in July, but it was slightly down from 18.2% last August.

Inflation expectations eased this month but remained at a high level. The expected inflation rate in twelve months declined to 7.0% in August from 7.4% in July (the series dates back to August 1987). The August reading was up from 6.7% last August and a 4.4% low in January 2020. An increased 70.2% of respondents expected that interest rates would rise over the next twelve months, up marginally from 70.1% in July and 60.9% last August.

The share of respondents planning to buy a home within six months rose to 5.4% in August after falling to 4.5% in July. It was below 6.3% last August and a 7.7% high in July 2020. Those planning to buy a major appliance showed 45.5% of respondents in August, up from 41.1% in July but down from 50.5% last August.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.

large image