WASHINGTON -- American consumers gave the economy in August its highest grade in more than 16 years.
The Conference Board said Tuesday that consumers' assessment of current economic conditions hit the highest level this month since July 2001. The business research group's overall consumer confidence index, which takes into account Americans' views of current conditions and their expectations for the next six months, rose to 122.9 in August from 120 in July.
The overall index hit bottom at 25.3 in February 2009 at the depths of the recession before reboundingas the U.S. economy recovered.
"Today's report suggests that household confidence remains on a strong footing, and we view this as constructive for consumer spending," in the third quarter, Michael Gapen, New York-based chief U.S. economist at Barclays Plc, wrote in a note Tuesday after the data were released.
The results reflect survey responses through Aug. 16, before Hurricane Harvey's landfall in Texas.
Americans' spirits have been lifted by a healthy job market. Employers added a robust 209,000 jobs in July, and the unemployment rate has dropped to a 16-year low of 4.3 percent.
The Conference Board found that 34.5 percent of respondents described business conditions as "good" -- the highest percentage since January 2001. Similarly, 35.4 percent described jobs as "plentiful" -- most since July 2001.
The report's present conditions measure increased to 151.2, highest since July 2001, from 145.4, and the gauge of consumer expectations rose to 104 from 103.
Consumers who said they expect better business conditions in next six months fell to 19.6 percent, from 22.4 percent in July. The share of households who expect incomes to rise in next six months increased to 20.9 percent in August, from 20 percent in July. The share of those who said more jobs will be available in coming months fell to 17.1 percent from 18.5 percent.
The Conference Board's data are in sync with other recent surveys. Sentiment climbed to a seven-month high in preliminary August data from the University of Michigan, and the Bloomberg Consumer Comfort Index posted the sixth consecutive gain to reach a 16-year high in the week ended Aug. 20.
Economists pay close attention to the numbers because consumer spending accounts for about 70 percent of U.S. economic activity.
Information for this article was contributed by Paul Wiseman of The Associated Press and by Shobhana Chandra of Bloomberg News.
Business on 08/30/2017