- Chris Rupkey, chief financial economist at MUFG Union Bank
US consumer confidence rose more than expected in August to the second-highest level in eight years as Americans held a more favourable view of the labour market. According to the Conference Board, the consumer confidence index surged to 101.5 this month, from a revised 91.0 in July. The present situation index, which measures current conditions, increased to a post-recession peak of 115.1 from 104 in the previous month. The future expectations index soared to 92.5 from 82.3. The share of Americans, who viewed jobs as "plentiful" rose from 19.9% in July to 21.9% in August, hitting the highest level since January 2008. Those who viewed jobs as "hard to get" plunged from 27.4% in July to 21.9% in August. Analysts predicted the advance in consumer confidence should support more robust consumer spending in coming months, thereby helping the economy strengthen further.
In a separate report, the Commerce Department said new home sales rose 5.4% to a seasonally adjusted annual rate of 507,000 units. Demand for new properties is likely to keep growing amid solid employment, low borrowing costs and a lack of available existing homes. The improving outlook may underpin more residential construction, contributing to the economic expansion in the second half of the year.
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