Consumer confidence hits highest level in seven years

Consumer sentiment continued improving in August, hitting pre-recession levels as better job creation and economic growth buoyed confidence.

The Conference Board’s index, released Tuesday, showed an increase in confidence for the fourth straight month, to 92.4 from 90.3 in July, the best performance since October 2007.

{mosads}“Looking ahead, consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings,” said Lynn Franco, director of economic indicators at The Conference Board.

“Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market.”

Amid stagnant wage growth, workers have been wary about getting their hopes up about the recent spurt of economic growth.

The survey showed that in the short-term fewer people expect their incomes to grow: 15.5 percent expected an increase in August, down from 17.7 percent in July. The number expecting a drop grew slightly, to 11.9 percent from 11.1 percent.

But the Conference Board’s survey found that the outlook on the job market improved significantly.

The percentage of those who said jobs were “plentiful” rose to 18.2 percent, from 15.6 percent in July, the highest level since 2008.

The government’s August employment report is due out next week and, so far, all signs point to another strong showing

Job growth is averaging about 230,000 a month this year, and if next week’s report eclipses 200,000, it will be the seventh straight above that level. 

During the recession, confidence flatlined, bottoming out at 25.3 in early 2009 before making a gradual improvement.

Meanwhile, consumers’ appraisal of current conditions continued to improve through August.

Those saying business conditions are “good” edged up to 23.9 percent, from 23.3 percent, while those saying business conditions are “bad” declined to 21.5 percent, from 22.8 percent.

Their assessment of the job market also was more positive.

Those stating jobs are “plentiful” increased to 18.2 percent, from 15.6 percent, while those saying jobs are “hard to get” declined slightly to 30.6 percent, from 30.9 percent.

Consumers, though, were slightly less optimistic in August about the short-term outlook.

The percentage of consumers expecting business conditions to improve over the next six months held steady at 20.4 percent, while those expecting conditions to worsen fell to 10.2 percent, from 12.1 percent.

Consumers were somewhat mixed about the near-term outlook for the labor market.

Those anticipating more jobs in the months ahead fell to 17 percent from 18.7 percent, although those expecting fewer jobs also declined to 15.8 percent from 16.6 percent.