The Conference Board’s Consumer Confidence Index, which had improved slightly in July, gained five points in August, finishing the month at 56.9 points (1985=100). The Present Situation Index declined to 63.2 from 65.8 last month and the Expectations Index increased to 52.8 from 42.7 in July, marking a six-month high.
The number of consumers citing current business conditions as “bad,” grew to 33.2 percent from 32.6 percent last month, as the number appraising conditions as “good” inched up to 13.4 percent from 13.2 percent.
Just under 26 percent of consumers thought business conditions would be worse in six months, down significantly from 32.4 percent last month. The balance, 74.2 percent, thought business conditions would be better or the same in six months, up from 67.6 percent in July.
Six-month buying plans for big-ticket items improved across the board, with 5.3 percent of consumers expecting to purchase a car, up from 5.0 percent in July; 3.3 percent planning on buying a home, up from 2.8 percent; and 31.6 percent predicting they would purchase a major appliance, up three percentage points from July.
Just one region—New England—posted a lower consumer confidence score in August, 39.4 versus 51.4, compared with July. The largest increase—12.8 points—was achieved in the West South Central region, which recorded 92.8 in August, compared with 80.0 in July.
Consumer confidence was identified as the number one measure of how the economy was performing by respondents in Home Furnishings Business’ exclusive economic survey, published in the October 2007 issue of HFB.
“Consumer confidence readings suggest that the economy remains stuck in neutral, but may be showing signs of improvement,” said Lynn Franco, director of the Conference Board Consumer Research Center.
“Declines in the Present Situation Index, both in terms of business conditions and the labor market, appear to be moderating. The Expectations Index, which posted a significant gain this month, suggests better times may be ahead. However, overall readings are still quite low by historical standards and it is still too early to tell if the worst is behind us,” Franco added.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The cutoff date for August’s preliminary results was Aug. 19.
