The University of Michigan/Thomson Reuters consumer sentiment index for August rose to 74.3, better than the preliminary reading of 73.6. The August reading also beat a consensus estimate of 73.8 and was nearly 2 points higher than the July reading of 72.3.
Even though the index is rising, it still has a long way to go before it reaches pre-recession levels of around 87. The August index reading indicates that Americans feel more secure in their current financial situation. The current conditions sub-index rose from 82.7 in July to 88.7 in August.
The August future expectations index fell slightly, from 65.6 in July to 65.1 in August. Apprehension about the future U.S. economy is likely to continue to rise as the November elections draw closer and the edge of the fiscal cliff gets nearer too. Continuing high levels of unemployment don’t help, crushing hopes for those still looking for work and creating anxiety in those who currently have jobs but wonder how long that can last.
On the brighter side, recent news on housing sales and new home construction could help lift employment and raise hopes for the future.
Clearly uncertainty about the economy continues to rule the day for consumers. Any day that they find an extra buck in their pocket is a good day, but few expect that extra buck to be there next week.
Paul Ausick
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