The economy is acting like it’s the year 2000 again.
For those of you who don’t follow such things as U.S. consumer confidence and the reports of the New York-based Conference Board, allow us to explain.
Americans, based on responses through Aug. 16, have taken their consumer confidence to the second highest-level since late 2000, according to The Conference Board.
What is driving this optimism?
Companies throughout the country are adding workers, unemployment is at a 16-year low, inflation in under control, homes are appreciating in value and the stock market is robust at nearly record highs.
In turn, this high level of consumer confidence suggests that people will increase their household spending. And, it should be noted, household spending is the biggest driver of the economy.
Other Reports Cite High Consumer Confidence
Bloomberg Markets reported Tuesday that “The Conference Board’s data are in sync with other recent surveys. Sentiment climbed to a seven-month high in preliminary August data from the University of Michigan, and the Bloomberg Consumer Comfort Index posted the sixth consecutive gain to reach a 16-year high in the week ended Aug. 20.”
Interestingly, economists polled by Reuters had expected consumer confidence to drop in August to a score of 120.3. Instead The Conference Board pegged consumer confidence at 122.9. The index previously hit 124.9 in March, which was the highest level since December 2000.
According to a report Tuesday from CNBC: “Consumers found the current environment to be improving. The Conference Board reported those saying business conditions are ‘good’ increased to 34.5 percent from 32.5 percent in the previous month, while the number who assessed business conditions to be ‘bad’ was slightly lower to 13.1 percent from 13.5 percent.”
Consumers’ assessment of the labor market was also more upbeat. Those stating jobs are “plentiful” rose from 33.2 percent to 35.4 percent, while those claiming jobs are “hard to get” decreased from 18.7 percent to 17.3 percent.
In addition, MarketWatch reported Tuesday that U.S. home price growth picked up steam in June as strong demand continued to buoy the market.
“The S&P/Case-Shiller 20-city index rose a seasonally adjusted 5.7% in the three-month period ending in June, compared with a year ago, the same rate of change as in May. The national index rose 5.8%, compared with a year ago, up from a 5.7% annual increase in May.” MarketWatch said.
“Nine cities had stronger annual price growth in June than in May, and western metros remained on top, with annual price gains ranging from 13.4% in Seattle to 7.7% in Dallas. Seattle prices are rising so rapidly that they have left No. 2 Portland in the dust, S&P Dow Jones Indices noted in a release.”