The US Consumer Confidence has performed well in the opening half of August, noting a record high since January, the Survey of Consumers conducted by the University of Michigan reveals.
The Consumer Sentiment Index soared by 4.5% from the preceding month’s data of 93.4. With the boost, it is now at 97.6. If to compare in a year over year basis, the index rose 8.7% or 89.8 respectively.
“Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects,” S Chief Economist Richard Curtin told reports.
“The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound,” Curtin explained further. “As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017.”
Advisor Perspectives’ Jill Mislinski also explained the data further, especially on how it affects it historically.
Since the inception, the Michigan average is at 85.4. Also, the average throughout the non-recessionary years is 87.6. The average all through the five recessions is 69.3.
At the opening of the current month of August, the Current Economic Conditions index has declined by 2.1% to 111, down from 113.4 in July. However, such data is still an increase of 3.7% from 107 last year.
Conversely though, such results do not hold the sentiments gathered from the recent occurrences in Charlottesville, Virginia.
“Too few interviews were conducted following Charlottesville to assess how much it will weaken consumers' economic assessments,” Curtin added further. “The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August.”
“Moreover, the Charlottesville aftermath is more likely to weaken the economic expectations of Republicans, since prospects for Trump's economic policy agenda have diminished,” Curtin states.
Nonetheless, while sentiment amongst Republicans might face a latent reduction, Curtin clarified the opinionated break in confidence is anticipated to persevere.
“Nonetheless, the partisan difference between the optimism of Republicans and the pessimism of Democrats is still likely to persist, with Independents remaining as the bellwether group,” Curtin explained. “At this point, the data continue to indicate a gain of 2.4% in personal consumption expenditures in 2017.”
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