Economy Watch: Consumers Feeling Good This Summer

The University of Michigan's latest sentiment survey reveals that consumer confidence in August reached its highest level since January, indicating a positive overall outlook for the U.S. economy.

Source: University of Michigan Surveys of Consumers, August 2017 (Preliminary)
Source: University of Michigan Surveys of Consumers, August 2017 (Preliminary)

U.S. consumer confidence rose in the first half of August to its highest level since January, according to the University of Michigan Surveys of Consumers on Friday. That might be good news for retailers and other industries that depend largely on optimistic consumers—provided the good feelings last.

The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, down to 111.0 in August from 113.4 the month before. By contrast, the Expectations Index posted a more substantial rebound: 89.0 in August, compared with 80.5 in July. As with the overall Sentiment Index, the component indices have nearly regained the peak levels recorded earlier in 2017.

Positive outlook 

Surveys of Consumers Chief Economist Richard Curtin posited that the rise was due to a more positive outlook for the overall economy, as well as more favorable personal financial prospects. 

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. At this point, the data continue to indicate a gain of 2.4 percent in personal consumption expenditures in 2017, Curtin said.