(Kitco News) - U.S. consumers remain slightly more optimistic than expected, even as overall U.S. consumer confidence struggles.
The Consumer Confidence Index dropped to 97.4, down from July’s revised reading of 98.7, the Conference Board said Tuesday.
“Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board.
Mixed sentiment data is not having much impact on gold, as the price continues to hold its recent gains below key resistance at $3,400 an ounce. Some analysts have warned investors that stable consumer confidence could dampen safe-haven demand for the precious metal.
Gold prices last traded at $3,370.90 an ounce, up 0.18% on the day.
Although consumer confidence was slightly better than expected, the report showed consistent weakness in its components. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell by 1.6 points to 131.2. At the same time, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—decreased by 1.2 points to 74.8.
“Expectations remained below the threshold of 80 that typically signals a recession ahead,” the report said.
Guichard noted further weakness in the labor market, as consumers’ appraisal of current job availability declined for the eighth consecutive month.
At the same time, inflation expectations are rising. Average 12-month inflation expectations increased after three consecutive months of easing, reaching 6.2% in August—up from 5.7% in July. However, inflation expectations are still below the April peak of 7%.
Jeffrey Roach, Chief Economist for LPL Financial, said that consumers’ outlook on the U.S. labor market is the biggest news in the report.
“Consumers are feeling a softening job market. We should expect upcoming nonfarm payrolls numbers to be on the soft side. I expect August payrolls to be roughly 60,000 net of revisions,” he said.
