Consumer confidence in the U.S. is hovering around a two-month low, a sign it will take more than steady job gains and low fuel prices to boost Americans’ spirits.
The Bloomberg Consumer Comfort Index was little changed at 40.7 in the week ended Aug. 9 compared with 40.3 in the prior period, which was the lowest level since early June. While attitudes on the buying climate improved, views on the economy and personal finances stagnated.
Sentiment has weakened even as companies add to head counts and refrain from staffing cuts. More pronounced wage increases, which have been slow to materialize throughout the recovery, will probably be needed to convince households to spend more freely in the coming months.
The Bloomberg buying climate gauge, which measures whether now is a good time to purchase goods and services, climbed to a three-week high of 37.1 from 35.5, Thursday’s report showed.
Meanwhile, the measure of Americans’ views on the current state of the economy dropped to 32 from 32.7. The index of personal finances was little changed at 52.8 compared with 52.6 a week earlier.
While the job market is progressing, worker pay raises are more limited. Jobless claims are holding just above four-decade lows and employers added 215,000 workers last month, helping keep the unemployment rate at a seven-year low of 5.3 percent.
Solid job gains have yet to drive bigger wages increases, a sign there’s still some room for improvement in the labor market. Average hourly earnings climbed 2.1 percent in July from a year earlier, staying within the same narrow range it’s tracked since the end of the recession six years ago.
Among income brackets, sentiment for those making less than $50,000 a year fell to its lowest level in eight months, led by a decline by those earning $40,000 to $50,000. Confidence for those making more than $50,000 climbed to the highest level in a month.
On a regional basis, confidence improved in all areas except the West. Sentiment fell among Americans working both full- and part-time, while it rose to a five-week high for those unemployed.