U.S. consumer confidence rose to an 11-month high in August, with households more upbeat about the labor market, in a further sign that the economy was regaining steam after faltering in the first half of the year, Reuters reports.
While other data today showed a moderation in house prices in June, the gains probably remain sufficient to boost household wealth and continue to support consumer spending, as well as make home purchasing affordable for first-time buyers.
“This will likely be interpreted as more evidence that the U.S. economic recovery is back on track following the missteps earlier this year,” says Millan Mulraine, deputy chief economist at TD Securities in New York.
The Conference Board says its consumer confidence index increased 4.4 points to 101.1 this month, the highest reading since September 2015. Consumers’ assessment of both current business and labor market conditions improved sharply in August.
The survey’s so-called labor market differential, derived from data about respondents who think jobs are hard to get and those who think jobs are plentiful, was the most favorable since January 2008.
This measure, which closely correlates to the unemployment rate in the Labor Department’s employment report, is pointing to further declines in the jobless rate and labor market slack.
Economists say this supported views by Federal Reserve officials that the jobs market was either at or near full employment. Fed Vice Chairman Stanley Fischer says the jobs market was “very close to full employment.”
Consumers’ bullish assessment of the labor market this month could be reflected in August’s employment report, which is scheduled for release on Friday, economists say.
