U.S. consumer confidence rebounds in August on sharp rise in expectations

The University of Michigan consumer confidence index rose in August. The U.S. consumer sentiment rebounded to 97.6 in August from 93.4. The current conditions index dropped from the previous month, so the rise was mainly driven by the strong rise in the future expectations index that rose to 89 from 80.5.

Consumer confidence rose considerably in the months immediately after the presidential elections last year and continues to be elevated in spite of some month-to-month fluctuations. Inflation expectations remained the same for the one-year ahead measure at 2.6 percent and dropped slightly for the five-to-ten-year ahead measure to 2.5 percent from 2.6 percent.

Overall, the August report reverses the weakening in consumer enthusiasm in recent months, and the confidence at these levels are seen as supportive of consumer spending in the third quarter, noted Barclays in a research report.

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