The US consumer confidence rose in August, almost at an 18-year high with a boost from households giving strong consumer spending that could support the economy for the rest of the year.
Although, the positive economic outlook was influenced by other data published on Tuesday as the trade deficit of goods increased sharply in July while the exports of agricultural products declined, signaling an increase in growth for the third quarter.
Confidence increased this month that raises a bit on concern on the protectionism policy of Trump’s administration that led to escalating concern between the U.S. and China that may similarly cause tariff concerns with the EU, Mexico, and Canada.
Economists have already presumed the costs of imports will increase for usual Americans given the higher costs of raw materials that add expenses to some manufacturers. Therefore, some companies resulted in employee layoff due to import tariffs.
According to the Conference Board, the consumer confidence index rose to 133.4 by 5.5 points in the current month, whereas the last highest reading was October 2000. Although, consumers assessment of present labor market and the business situation has shown progress in August.
The figures correlate to the unemployment rate in the Labor Department’s employment report, which is near full employment. As for the consumer inflation, the forecast says moderate growth this August from the previous month.
However, another data from the University of Michigan survey shows a different figure as it dropped to an 11-month low at the beginning of August amid concerns on rising inflation affected by low wage hike and weakening purchasing power. The difference is deemed by the economists to be due to the treatment of the labor market.