A measure of economic confidence among American households rose in August to its highest level since October 2000.
The Conference Board on Tuesday said its index of U.S. consumer confidence climbed to 133.4 in August from 127.9 in July. The August reading well exceeded economists’ expectations.
Factors including a buoyant job market and rising incomes are helping Americans feel better about the economy.
“Going into August, all signs were green for continued increases in consumer sentiment and consumer confidence. So that’s what we’re seeing in the headline number here,” said David Deull, principal economist at IHS Markit.
A gauge of household assessments about the present economic situation increased in August, while an index tracking expectations for the future also rose after declining in June and July.
“Overall, these historically high confidence levels should continue to support healthy consumer spending in the near term,” said Lynn Franco, the Conference Board’s director of economic indicators.
This increasing optimism about the economic outlook also “suggests a degree of skepticism about trade, inflation or anything else knocking the economy off track,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors, in a note to clients. “Should either of those evolve into a larger problem, consumers may be caught by surprise.”
Some 42.7% of survey respondents in August said jobs were plentiful, similar to a month earlier when 42.8% reported jobs were plentiful. The number of households describing current business conditions as good increased in August to 40.3% from 38.1%
Consumers’ buying plans improved across several categories. This contrasts with recent months, in which the percentage of Americans planning to make major purchases such as a car, home or washing machine, had fallen.
Confidence rose for many groups, including older Americans, whose sentiment jumped to the highest level in nearly 18 years.
Measures of U.S. household and business confidence jumped after the 2016 presidential election and have remained high, buttressed by underlying strength in the economy.
Still, other measures of consumer confidence show Americans’ rising concerns. The University of Michigan’s index of consumer sentiment slid in August to its lowest level in nearly a year, weighed down by household pessimism regarding rising prices.