Consumer confidence in the U.S. unexpectedly saw a modest improvement in the month of August, according to a report released by the Conference Board on Tuesday, with the increase reflecting improving short-term expectations.
The Conference Board said its consumer confidence index edged up to 81.5 in August from an upwardly revised 81.0 in July.
The modest increase came as a surprise to economists, who had expected the index to dip to 78.0 from the 80.3 originally reported for the previous month.
"Consumers were moderately more upbeat about business, job and earning prospects," said Lynn Franco, Director of Economic Indicators. "In fact, income expectations, which had declined sharply earlier this year with the payroll tax hike, have rebounded to their highest level in two and a half years."
She added, "Consumers' assessment of current business and labor market conditions, on the other hand, was somewhat less favorable than last month."
The unexpected increase by the headline consumer confidence index came as the expectations index climbed to 88.7 in August from 86.0 in July.
Consumers expecting business conditions to improve over the next six months edged up to 20.1 percent from 19.9 percent, while those expecting conditions to worsen dipped to 11.1 percent from 11.3 percent.
The Conference Board also said the outlook for the labor market remained upbeat, with consumers expecting more jobs in the months ahead rising to 17.6 percent from 16.7 percent, while those anticipating fewer jobs edged down to 17.3 percent from 17.7 percent.
The proportion of consumers expecting their incomes to increase also rose to 17.4 percent from 15.7 percent, while those expecting a decrease in their incomes slipped to 13.5 percent from 13.7 percent.
Meanwhile, the report also showed that the present situation index fell to 70.7 in August from 73.6 in the previous month.
Consumers saying current business conditions are "good" dropped to 18.4 percent from 20.8 percent, while the proportion saying business conditions are "bad" was virtually unchanged at 24.8 percent.
The Conference Board said consumers' appraisal of the labor market was mixed, While those saying jobs are "plentiful" fell to 11.4 percent from 12.3 percent, those saying jobs are "hard to get" also declined to 33.0 percent from 35.2 percent.
Friday morning, Reuters and the University of Michigan are scheduled to release their revised report on consumer sentiment in August.
Economists expect the consumer sentiment index for August to be unchanged from the preliminary reading of 80.0, which was down from a six-year high of 85.1 in July.
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