U.S. consumer confidence rebounded in August to the strongest reading in seven months, after having fallen sharply in July.
The Conference Board said Tuesday that its index of consumer confidence increased to 101.5 in August, up from a revised July reading of 91.0. It was the best showing since January.
Conference Board economist Lynn Franco said that consumers’ assessment of current conditions was considerably more upbeat in August, primarily due to a more favorable view of the labor market.
The cutoff for responses to this survey was Aug. 13, a week before the deep plunge in stocks that began last Thursday.
Consumer expectations about current conditions were more favorable in August, with consumer opinions about the job market considerably more favorable. Those who viewed jobs as “plentiful” increased from 19.9 percent in July to 21.9 percent in August. Those who viewed jobs as “hard to get” decreased from 27.4 percent in July to 21.9 percent in August.
Analysts said the jump in consumer confidence should support stronger consumer spending in coming months.
“The rise in consumer confidence adds to the evidence that the outlook for consumption growth in the second half of the year remains healthy,” said Adam Collins, an economist at Capital Economics. Consumer spending accounts for 70 percent of economic activity.
While the recent turbulence in the stock market could rattle consumers’ nerves, analysts said the stock market turmoil would likely be offset by the steep decline in oil prices, which leaves consumers with more money to spend.