(Yahoo!Finance) - The economic story of the summer has been about resilient growth in the US. But for months now, survey-based readings on the manufacturing and services sectors have suggested more weakness in the economy than hard data like GDP data and the monthly jobs report have shown.
The Conference Board's monthly consumer confidence index showed a surprise dip in August, with rising gas prices and lowered optimism regarding the labor market the primary factors.
Chief economist at The Conference Board Dana Peterson said in a release, "Assessments of the present situation dipped in August on receding optimism around employment conditions: fewer consumers said jobs are 'plentiful' and more said jobs are 'hard to get.'"
"Hard data confirm that employment gains have slowed, overall wage increases are less generous compared to a year ago, and the average number of weeks of unemployment is ticking upward."
To wit: On Tuesday we also learned that the number of open jobs in July fell to 8.83 million, the lowest level for the US economy since March 2021. Hires in July also totaled 5.78 million, the fewest since January 2021.
In the same month this JOLTS data was collected, we saw hiring in the economy slow to its slowest pace since December 2020 as just 187,000 new jobs were created.
And while unemployment remains near record low levels, the levels captured by hard data like the BLS's monthly jobs report may not be as quick to catch changes on the margins of the labor market like The Conference Board's survey-based consumer confidence reading.
And the distinction between these types of reports is key.
Survey-based data is what it sounds like — economic reports based on surveys of business execs or consumers who are asked how things are going. These reports are generally measured as differentials between how many people said things were good minus those who think things are bad.
Hard data, in a slight contrast, is compiled responses measured against an index of previously compiled responses. For instance, the monthly Consumer Price Index (CPI) is compiled by asking consumers what they pay for a variety of goods over a two-week period, then comparing those prices to what other people paid for similar goods over previous periods.
As TKer's Sam Ro highlighted Tuesday, recent polling shows many Americans are hearing mostly negative news about the economy.
And so it tracks that both consumers and business execs — who are also consumers! — would respond with generally more downbeat views about the economy when asked. Hence a more negative view from data that measures differentials rather than levels.
So the overall risk to the economy is that the latter set of data catches up, or rather, catches down, to the former.
And Tuesday offered some signs of this dynamic creeping in.
By Myles Udland · Head of News
