Consumer confidence rises for the first time in four months on cheaper gas and slower inflation

The numbers: A survey of US consumer confidence rose in August for the first time in four months thanks to falling gasoline prices, suggesting a slowing economy stabilized toward the end of summer.

Economists polled by The Wall Street Journal had forecast the index to rise to 97.4 from 95.7 in the prior month.

Big picture: Americans have had some relief from high inflation due to tumbling gas prices, but the outlook for the economy has gotten worse.

The Federal Reserve is raising interest rates to try to tame the highest inflation in 40 years and promising more “pain” for consumers and businesses. And many economists think another recession is likely by next year.

Higher rates raise the cost of borrowing and tend to make consumers and businesses spend less.

Key details: A measure of how consumers feel about the economy right now rose to 145.4 in August from a 15-month low of 139.7 in the prior month, the nonprofit Conference Board said Tuesday.

A similar confidence gauge that looks ahead six months jumped to 75.1 from 65.6 — the highest level in four months.

Looking ahead: “August’s improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term,” said Lynn Franco, senior director of economic indicators at the board.

Market reaction: The Dow Jones Industrial Average DJIA,
-0.83%
and S&P 500 SPX,
-1.04%
fell again in Tuesday trades.

.

Leave a Comment

Your email address will not be published.