• US consumer confidence increased to 81.5 in August 2013 from 81.0 in the previous month. Market expectations had been for a reading of 79.0.
• Consumer confidence is holding near five-year highs as households maintain a more optimistic outlook for job prospects and earnings while rising house prices provide a boost to household balance sheets. This improved view of the economy, while still much less upbeat than pre-recession norms, is supportive of our expectation that consumers activity will accelerate during the second half of this year and into 2014, and underpin a pickup in the pace of growth in the overall US economy during the forecast horizon.
• In a separate release, the seasonally-adjusted S&P/Case-Shiller 20-City Composite measure of US home prices rose 0.9% in June 2013. The annual pace of increase in the unadjusted index edged downward slightly to 12.1% from the seven-year high of 12.2% in May.
The Conference Board’s measure of US consumer confidence rose 0.5 points to 81.5 in August 2013 (expectations had been for a reading of 79.0) partially to reverse July’s 1.1 point decline that followed the cumulative 20.2 point increase recorded from April to June. The improvement in sentiment in August reflected more optimistic appraisals of the short-term outlook, with the “expectations for six months hence” component up 2.7 points to 88.7. In contrast, the “present situation” component slipped for the first time in five months and was down 2.9 points to 70.7.
With respect to labour market conditions, 11.4% of survey respondents said jobs were currently “plentiful” compared to 12.3% in July while those saying jobs were “hard to get” declined to 33.0%, which was the lowest share since September 2008, compared to 35.2% in July. This resulted in the labour market differential (the difference between these two components) improving to -21.6 in August from -22.9 in July. In terms of the job market outlook, the assessment was more optimistic with the share of respondents expecting more jobs greater than those expecting fewer jobs (17.6% compared to 17.3%).
Consumer confidence is holding near five-year highs as households maintain a more optimistic outlook for job prospects and earnings while rising house prices provide a boost to household balance sheets. This improved view of the economy, while still much less upbeat than pre-recession norms, is supportive of our expectation that consumers activity will accelerate during the second half of this year and into 2014, and underpin a pickup in the pace of growth in the overall US economy during the forecast horizon.
In a separate release, the seasonally-adjusted S&P/Case-Shiller 20-City Composite US home price index rose 0.9% on a month-over-month basis in June, compared to market expectations for a 1.0% gain. The measure is now at its highest level since September 2008. The unadjusted index rose 12.1% on a year-over-year basis in June 2013, which was down slightly from the 12.2% gain in the previous month that represented a seven-year high.
RBC