--- title: "Monday Update (on Tuesday): Consumer Spending Better Than Expected" description: In his Monday Update, Commonwealth’s Sam Millette discusses durable goods orders, consumer and business confidence, trade, and August jobs. image: https://blog.commonwealth.com/hubfs/Brad_Images_IMO_Blog/2017/MarketOutlook_1.jpg --- [![The Independent Market Observer](https://blog.commonwealth.com/hubfs/IMO-Title-1.png "The Independent Market Observer")](https://blog.commonwealth.com/independent-market-observer) [![Commonwealth Financial Network](https://blog.commonwealth.com/hubfs/lockup_citron-1.png "Commonwealth Financial Network")](https://www.commonwealth.com/) - [Home](https://blog.commonwealth.com/independent-market-observer) - [About](https://learn.commonwealth.com/about/) ### ![print this page](https://blog.commonwealth.com/hs-fs/file-1376458285-gif/images/print.gif)Print # [Monday Update (on Tuesday): Consumer Spending Better Than Expected](https://blog.commonwealth.com/independent-market-observer/monday-update-on-tuesday-consumer-spending-better-than-expected) Posted by [Sam Millette](https://blog.commonwealth.com/independent-market-observer/author/sam-millette) This entry was posted on Sep 3, 2019, 1:27:24 PM and tagged [In the News](https://blog.commonwealth.com/independent-market-observer/topic/in-the-news) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/monday-update-on-tuesday-consumer-spending-better-than-expected#comments-listing) ![In his Monday Update, Commonwealth’s Sam Millette discusses durable goods orders, consumer and business confidence, trade, and August jobs.](https://blog.commonwealth.com/hs-fs/hubfs/Brad_Images_IMO_Blog/2017/MarketOutlook_1.jpg?width=300&name=MarketOutlook_1.jpg)Last week’s economic data releases focused on durable goods orders, consumer confidence, and consumer income and spending. The news was a bit mixed, as we saw stronger-than-expected consumer spending growth despite a drop in consumer confidence. This week, although short, will be busy again, with updates on business confidence, trade, and the August job report. ##### Last week’s news We kicked off the week with Monday’s release of the July **durable goods orders** report. It showed 2.1 percent growth in orders during the month, which was better than the 1.2 percent increase expected by economists. Much of this outperformance was due to an increase in volatile aircraft orders. The core durable goods figure, which strips out transportation orders, declined by 0.4 percent during the month against expectations for no growth. Core durable goods orders are considered a proxy for business confidence in the future of the economy, so this decline is disappointing. It is not, however, entirely surprising given the ongoing uncertainty caused by increasing trade tensions. On Tuesday, the **Conference Board Consumer Confidence Index** for August was released. The index declined slightly, from 135.7 in July to 135.1 in August. Economists had forecast a larger decline to 129, so this was a better-than-expected result. It was driven by an increased optimism over the current economy, as the present situation portion of the index rose to highs last seen in 2000. Expectations for the future declined slightly but remain at high levels compared with the past few years. On Friday, July’s **personal income** and **consumer spending** reports showed that consumers are not just saying that they are confident. They’re going out and spending their money, too. Spending grew by 0.6 percent in July, against expectations for 0.5 percent growth. This result is in line with the strong retail sales we saw during the month. Income growth was disappointing, at 0.1 percent versus the expected 0.3 percent growth. Both income and spending have shown consistent growth this year, however, so this miss in income growth is nothing to be concerned about for the time being. We finished the week with the second and final release of the **University of Michigan consumer sentiment survey**. This survey fell from 92.4 midmonth to 89.8 at month-end, even though economists had expected it to increase slightly. The escalation of the China-U.S. trade war and continued market volatility likely played a part in the decline in confidence for the second half of the month. While both major consumer confidence surveys declined during July, the good news is that consumers have shown impressive spending growth through most of the year. Hopefully, these declines in confidence will have little impact on August’s consumer spending data. ##### What to look forward to The week started with Tuesday’s release of the **ISM Manufacturing index,** which showed an unexpected decline from 51.2 in July to 49.1 in August. This is a diffusion index, where values above 50 represent expansion and values below 50 represent contraction. August’s reading, the lowest for the index since January 2016, marks the first time the manufacturing sector has experienced a contraction since August 2016. It also marks the fifth straight month of decline for the index, as the slowdown in global trade and the uncertainty created by the ongoing U.S.-China trade war have negatively affected manufacturers. Speaking of trade, Wednesday will see the release of July’s **international trade** report. It is expected to show the trade deficit shrinking from $55.2 billion in June to $54.3 billion in July. Previously released trade reports showed growth in goods exports rising by more than expected during the month, as well as a decline in goods imports, which led to a narrowing of the goods deficit. This combination of rising exports and declining imports for goods is expected to lead to a narrowed deficit in overall trade. On Thursday, we’ll receive the **ISM Nonmanufacturing index** for August. Economists expect to see increased confidence for the service sector of the economy, with the index set to increase from 53.7 in July to 54 in August. This survey fell unexpectedly in July to a three-year low, so a rebound would help dispel concerns about lowered business confidence. Finally, we’ll finish the week with Friday’s release of the August **employment report**. Economists expect 168,000 new jobs during the month, which is slightly better than the 164,000 we saw in July. Unemployment is expected to remain unchanged at 3.7 percent. Despite the expected growth in August, job growth remains well below the roughly 225,000 per month rate we averaged in 2018. This will be an important area of the economy to monitor going forward, especially if we continue to see further weakness in employment growth while the Fed considers further interest rate cuts. That’s it for this week—thanks for reading!  - [Tweet](https://twitter.com/share) ### Subscribe via Email ![TMO_IMO_615x408_sidebar](https://blog.commonwealth.com/hs-fs/hubfs/TMO_IMO_615x408_sidebar.png?width=1033&height=686&name=TMO_IMO_615x408_sidebar.png "TMO_IMO_615x408_sidebar") [Episode 20](https://vimeo.com/1201911815/0f4f028be9?share=copy&fl=sv&fe=ci) June 17, 2026 [Episode 19](https://vimeo.com/1191658257/1b43ce84dd?share=copy&fl=sv&fe=ci) May 13, 2026 [Episode 18](https://vimeo.com/1183174918/e227cf7d80?share=copy&fl=sv&fe=ci) April 15, 2026 [Episode 17](https://vimeo.com/1174554734/636f0f7aba?share=copy&fl=sv&fe=ci) March 18, 2026 [Episode 16](https://vimeo.com/1163757312/bc2f802d74?share=copy&fl=sv&fe=ci) February 11, 2026 [More](https://learn.commonwealth.com/monthly-media-placements) [![Insights_CTA_IMO_233x400-1](https://no-cache.hubspot.com/cta/default/295024/interactive-187935228457.png)](https://blog.commonwealth.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKrlJGzRu94mOnuWUHT8xnwpHyuAu9bx%2BTnqzSh%2BO4dXfs3T9AeThwKiwuFtD%2FvObOmFpnRL3oXOxT56jwbnq5lsRjNKY0oFXdkkXA5pJgZoLWW%2FVFFTUGVvGeWN428XfB4IoQ08vgGOCWEnzTlCAUsUOvfT8HVVJCP6gkGgi2KftquH3onK6U%3D&webInteractiveContentId=187935228457&portalId=295024) ### Hot Topics Select Category Ask Brad Commentary Economic Risk Factor Updates Economics Lessons Market Thoughts Videos In the News Investing Market Updates On My Bookshelf Politics and the Economy [![New Call-to-action](https://no-cache.hubspot.com/cta/default/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf.png)](https://cta-redirect.hubspot.com/cta/redirect/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf) ### Archives - 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