US Consumer Confidence Strong, but not Strong Enough

US Consumer confidence in the US climbed higher in August at a slower rate than forecasted, this showed a decrease in the personal finances of younger Americans. The University of Michigan’s preliminary index of sentiment rose to 90.4 from a 3 month low of 90 in July, according to a report on Friday, the average report estimated by a Bloomberg survey forecasted a reading of 91.5, as a value in the range of 89 to 93.1 was also widely anticipated by traders.

Consumers appeared to have been granted more power and confidence to spend after payrolls showed an acceleration in wage increases and strong gains for two consecutive months. Meanwhile the controversy surrounding the upcoming US presidential election could hold back the demand in households that has upheld US economic growth this year despite the presence of weak investment by companies.

The growing confusion in the US economy spanning from the election “probably reflects each candidate’s focus on the negative economic outcomes if the other candidate is elected”, Richard Curtin, director of the survey, said in a statement.

He also stated in his surveys that, “Confidence inched upward in early August due to more favorable prospects for the overall economy offsetting a small pullback in personal finances. Most of the weakness in personal finances was among younger households who cited higher expenses than anticipated as well as somewhat smaller expected income gains. Concerns about Brexit have faded amid rising references to the outcome of the presidential election as a source of uncertainty about future economic prospects.”

The Commerce Department on Friday released reports revealing that sales made by US retailers were sparsely affected in July, as they missed analysts’ expectations of an increase, especially with Americans rushing to Auto dealers leaving a small void in the patronage of other merchants. An assessment of the state of personal finances which is covered by the Michigan current conditions index, slumped from 109 in July to a 5 month low of 106.1. A measure of expectations for the coming 6 months bounced to 80.3 from 77.8 last month.

The US dollar index, the tool used to track the USD against a basket of some other major currencies was trading at 95.39, compared to the 95.41 it previously hovered around in anticipation of the release.

In the commodities markets crude oil traded at $43.82 a barrel from the $43.97 it stood at earlier and gold futures traded at $1,358.45 a troy ounce, compared to $1,358.55 ahead of the data release.

In the US stock market, stocks fell lower in the period following the release, as the tech filled Nasdaq composite fell by 0.18% the equivalent of 9 points, the Dow Jones slipped 19 points lower after shedding 0.10%, and the S&P500 experienced a 0.11% decline as it dropped 2 points lower.