Even as headlines have been chaotic this month, Consumer Confidence rebounded and remains right near its highs for the cycle. While economists were forecasting the August reading to come in at a level of 120.7, the actual reading came in at 122.9, which is the second highest reading of the cycle, behind only the 124.9 reading from March.
Summer may be ending, but that means you can take advantage of our Labor Day Special and receive a month of full access to any one of our research services for just $1 and then 20% off for the life of the subscription!
Breaking out this month’s report by Present Conditions and Expectations, consumers are more optimistic about the present than they are of the future, but that’s actually been a pretty common trend in the last few years. While the index for Expectations is also right near its highs for the cycle, the Present Situation index ticked up to 151.2, which is the highest monthly reading since July 2001.
The reason for this optimism on the part of consumers is primarily due to jobs. In August, 35.4% of consumers considered jobs to be plentiful, and that is also the highest reading since July 2001. Additionally, if you look closely at the chart, you can see how much it has surged in recent months. In fact, there have only been five other periods since the late 1960s where the percentage of consumers considering jobs to be ‘plentiful’ saw a similar or greater increase during a six-month span.
Broken out by age, the recent Consumer Confidence readings have been quite interesting. Generally speaking, younger consumers who have their whole careers ahead of them are usually more optimistic than older consumers near the end of their working years. In the last several months, though, sentiment among older consumers has been improving at a much faster rate than younger consumers. In this month’s report, the confidence index for consumers over the age of 55 increased to a new cycle high and the best level in over 17 years.
Our last chart shows how the trend in confidence by age has really shifted in the last several months. In it, we show the six-month spread between confidence for those under the age of 35 and those over 55. While this spread bottomed at just over 10 percentage points in the early months of Obama’s Presidency, it steadily climbed throughout his two terms in office and actually peaked right around election day. Since then it has cratered by more than half in an incredibly short span of time. While Obama may have lifted the spirits of younger Americans, Trump has clearly had a positive impact on older Americans.