Claman Countdown panelists Scott Redler and Michael Landsberg weigh in on the possibility of a recession.
We Consumer Confidence Although Americans are growing increasingly worried about the labor market after last month's rise in the unemployment rate, rising optimism about the economy helped push the unemployment rate to its highest level in six months in August.
The better-than-expected consumer confidence reading in the Conference Board report reflects perceptions of economic recovery over the next six months and suggests that the likelihood of the U.S. economy falling into recession continues to decrease.
Americans' worries about the labor market come after the unemployment rate rose to 4.3% last month, nearing its highest level in three years. Federal Reserve Chairman Jerome Powell With Powell signaling a rate cut on Friday, central bank policymakers have shifted their focus from tackling inflation heading toward the Fed's 2% target to the labor market.
“Consumers continued to express mixed feelings in August,” said Dana M. Peterson, chief economist at the Conference Board. “Compared to July, consumers became more positive about the current and future economic situation, but also more concerned about the labor market.”
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The Conference Board report said consumer confidence rose slightly even as consumers became more concerned about the labor market. (Photo by Robert Nickelsburg/Getty Images/Getty Images)
“Consumers' assessment of the current working situation remains positive but continues to weaken. Labor market “Consumers were more pessimistic about the future, which likely reflects the recent rise in unemployment. Consumers were also less optimistic about their future incomes,” Peterson added.
The Conference Board's consumer confidence index rose to 103.3 this month, the highest since February from a revised 101.9 in July. Economists polled by Reuters had expected the index to be little changed from the previous reading of 100.3.
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The Federal Reserve signaled it is likely to cut interest rates next month, easing monetary policy. (Photographer: Michael Nagle/Bloomberg via Getty Images/Getty Images)
The group's expectations index, based on consumers' near-term outlook for income, business and labor market conditions, improved to 82.5 from 81.1 in July, the highest level since August 2023. A reading below 80 is typically a sign of an economic downturn, and Peterson said “percentage of consumers are optimistic.” Predicting a recession It remains stable and well below the 2023 peak.”
The survey's so-called labor market gap — calculated from respondents' views of whether jobs are plentiful or hard to come by — fell to 16.4 from 17.1 in July, the smallest gap since March 2021. This particular measure correlates with the unemployment rate in the Labor Department's monthly employment report. Rising unemployment rate For four consecutive months.
“While we don't necessarily use this metric to predict month-to-month changes in the unemployment rate, the fact that it continues to worsen is not a good development,” said JPMorgan economist Abiel Reinhart in a Reuters report. “The message here is that July's rise in the unemployment rate was not just a fluke.”
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Consumer confidence has reached its highest level in six months, according to the latest report from The Conference Board. (Photo: Spencer Pratt/Getty Images/Getty Images)
The survey showed consumers are increasingly optimistic about falling inflation, with 12-month inflation expectations falling to 4.9%, the lowest level since March 2020, from 5.3% in July.
Additionally, amid a softening labor market, consumers are becoming more pessimistic about their income outlook over the next six months: The share of consumers who expect their income to increase fell to 16.9% from 17.2% in July, while the share who expect their income to decrease rose to 12.7% from 11.6% a month ago.
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Reuters contributed to this report.
