Americans' feelings about the economy improved in August for the first time in three months, according to the latest Conference Board Consumer Confidence Index. The monthly survey, which asks consumers about their view of business and labor conditions, increased to 145.4 from 139.7 in July.
The positive turn is notable given the recent whiplash-inducing mix of economic data. To list just a few of the seemingly contradictory numbers: Inflation remains at a 4o-year high but is beginning to moderate. The housing market is in a "recession." Gross domestic product is down for the second quarter in a row. Gross domestic income is up, and unemployment remains historically low.
Top economists are struggling to piece it all together, let alone regular Americans, but consumers were nonetheless more optimistic in August.
The number of Americans who thought business conditions were "good" jumped to 19.2 percent from 16.3 percent, while the number who thought business conditions were "bad" increased to 23.2 percent from 24.2 percent. As for future expectations, the number of consumers who expect business conditions to improve jumped to 17.5 percent from 13.7 percent. This bodes well for other measures such as consumer spending, but it's not a guarantee either.
"Looking ahead, August’s improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term," said Lynn Franco, senior director of economic indicators at The Conference Board, in a news release.
Consumers were also more optimistic about the labor market. Those who expected more jobs to be available in the future jumped to 17.4 percent from 15.1 percent, and 19.3 percent anticipate fewer jobs, which is down from 21.1 percent.
This tracks with the overall robust job market, and with the latest data on openings. The Job Openings and Labor Turnover Summary (JOLTS) released Tuesday showed 11.2 million job openings in July. That is still historically high, up slightly from June and one million jobs above FactSet estimates. Hires (6.4 million) and separations (5.9 million), meanwhile, were mostly unchanged from the previous month.
In addition, there was some good news out of the housing market — at least from a consumer perspective. The S&P CoreLogic Case-Shiller Indices showed deceleration of home prices in June, though prices are still increasing rapidly. The measure's 20-City Composite showed 18.6 percent year-over-year gains, down from 20.5 percent the month before. This still means home prices are increasing in the double digits, but the data provide more evidence of a nationwide slowdown in the rate of increase.
"The market's strength continues to be broadly based, as all 20 cities recorded double-digit price increases for the 12 months ended in June," said Craig J. Lazzara, managing director at S&P DJI, in a news release. "In 19 out of 20 cases, however, June's reading was less than May's, showing the impact of deceleration at the regional level."