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Consumer Sentiment Is Highest In Months -- WSJ

19 Aug 2017 6:32 am
By Josh Zumbrun and Sarah Chaney 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 19, 2017).

U.S. consumer sentiment increased in the first half of August to its highest level since January, as Americans increasingly placed their hopes on the economy's future.

Those expectations could soften in later readings, given recent events including political turmoil in the wake of violence in Charlottesville, Va., and Thursday's stock market decline.

The University of Michigan on Friday said its preliminary reading on overall consumer sentiment during August was 97.6, up from 93.4 in July. Economists surveyed by The Wall Street Journal had expected an August figure of 94.5.

An index that tracks expectations about the future rose to 89.0 in August from 80.5 in the previous month. An index tracking confidence in the current economic situation fell to 111.0 from 113.4 in July.

Economic data offer signs that consumption growth could remain strong in the coming months. Sales at U.S. retailers rose 0.6% in July, the biggest monthly gain since December, the Commerce Department said Tuesday.

"With jobless claims continuing to trend lower, gasoline prices subdued, and the stock market only falling a few percent from its recent record highs, consumer sentiment is likely to remain buoyant for the months ahead," said Michael Pearce, U.S. economist at Capital Economics, in a note to clients.

Still, signs of unease are brewing.

News over the past week has been dominated by reaction to racially charged protests in Charlottesville, Va. Richard Curtin, the Michigan survey's chief economist, said too few interviews were conducted after the protests to gauge how much the events will affect consumer sentiment.

"The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August, " Mr. Curtin said.

The Dow Jones Industrial Average recorded its biggest drop in three months Thursday, another potential blow to consumer sentiment. Stocks extended declines in the aftermath of a terror attack in Barcelona.

Write to Josh Zumbrun at Josh.Zumbrun@wsj.com and Sarah Chaney at sarah.chaney@wsj.com
 

(END) Dow Jones Newswires

August 19, 2017 02:32 ET (06:32 GMT)

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