CONSUMER CONFIDENCE UNEXPECTEDLY JUMPS TO 7-YEAR HIGH

Consumer confidence surged in August.

According to the Conference Board’s new report, the consumer confidence index jumped to 92.4 in August, the highest level since October 2007.

This is up from 90.3 in July, and it was much stronger than the 89.0 forecasted by economists.

Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers’ spirits,” said the Conference Board’s Lynn Franco. “Looking ahead, consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings. Overall, however, they remain quite positive about the short-term outlooks for the economy and labour market.”

From the Conference Board:

Consumers’ appraisal of current conditions continued to improve through August. Those saying business conditions are “good” edged up to 23.9 per cent from 23.3 per cent, while those claiming business conditions are “bad” declined to 21.5 per cent from 22.8 per cent. Consumers’ assessment of the job market was also more positive. Those stating jobs are “plentiful” increased to 18.2 per cent from 15.6 per cent, while those claiming jobs are “hard to get” declined marginally to 30.6 per cent from 30.9 per cent.

Consumers 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 per cent, while those expecting business conditions to worsen fell to 10.2 per cent from 12.1 per cent. Consumers, however, were somewhat mixed about the outlook for the labour market. Those anticipating more jobs in the months ahead fell to 17.0 per cent from 18.7 per cent, although those anticipating fewer jobs also declined to 15.8 per cent from 16.6 per cent. Fewer consumers expect their incomes to grow, 15.5 per cent in August versus 17.7 per cent in July, while those expecting a drop in their incomes rose marginally to 11.9 per cent from 11.1 per cent.

Here’s a historical look:

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