US Consumer Confidence Scales Six-Month High, Labour Market Angst Rises

• U.S. consumer confidence rose to a six-month high in August amid optimism over the economic outlook, but Americans are becoming more anxious about the labor market after the unemployment rate jumped to near a three-year high of 4.3% last month.
• The better-than-expected reading in consumer confidence, reported by the Conference Board on Tuesday, reflected improved perceptions of business conditions over the next six months, and the survey suggested the odds of a recession had continued to decline. Consumers' uneasiness over the labour market is mirrored by concerns at the Federal Reserve, with Fed Chair Jerome Powell last Friday signaling.
• "This report supports a rate cut on both the decline in inflation expectations and a softening labor market but is not so weak as to suggest a recession at this point," said Conrad DeQuadros, senior economic adviser at Brean Capital. The Conference Board's consumer confidence index increased to 103.3 this month, the highest level since February, from an upwardly revised 101.9 in July.
• Economists polled by Reuters had forecast the index would be little changed from the previously reported 100.3. Confidence was higher among consumers aged 35 years and older, and those with annual incomes above $100,000. The cutoff date for the survey was Aug. 21. The rise in confidence could have been influenced by President Joe Biden dropping out of the November presidential race and the nomination of Vice President Kamala Harris to head the Democratic Party ticket.
• Consumers were less upbeat, however, about the labor market. The share of consumers who viewed jobs as "plentiful" slipped to 32.8% from 33.4% in July. Some 16.4% of consumers said jobs were "hard to get," up from 16.3% last month.
• The survey's so-called labour market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, fell to 16.4, the narrowest since March 2021, from 17.1 in July. This measure correlates to the unemployment rate in the Labor Department's monthly employment report. The unemployment rate has risen for four straight months.

(Source: Reuters)