US Consumer Confidence Rises Amid Greater Optimism for Future
The Conference Board's consumer confidence index increased to 103.3 in August from an upwardly revised 101.9 in July. This rise indicates an improvement in consumers' outlook for the future, with short-term expectations for income, business, and the job market also seeing an uptick. However, there are growing concerns about the labor market as the share of consumers viewing jobs as "plentiful" decreased slightly to 32.8% from 33.4% in July.
Federal Reserve Chair Jerome Powell has hinted at potential interest rate cuts due to economic concerns. The Federal Reserve has maintained its benchmark overnight interest rate in the range of 5.25%-5.50% for over a year, having raised the policy rate by 525 basis points in 2022 and 2023. Meanwhile, consumers' 12-month inflation expectations dropped to 4.9%, the lowest since March 2020. Despite the rise in consumer confidence, the labor market's outlook remains a point of anxiety for many Americans.
