US consumer confidence rose for the 4th straight month and posted its second highest reading in the last 16 years. The Conference Board said its consumer confidence index increased to a reading of 122.9 in August which was above expectations. US consumers remain upbeat thanks to the strong stock market, rising real estate prices and a tight labor market. Consumers have thus far shaken off the news of violence in Charlottesville and the increasing tensions between North Korea and the US. While war is always a risk to markets, we believe that cooler heads will prevail. Tougher sanctions will likely be the next step against North Korea unless they do something really crazy. Keep in mind that North Korea is so puny that it is almost laughable. It is like boxer Floyd Merriweather showing up to your house for a fight. For comparison, in one day, the US makes up over 2x the size of North Korea’s annual GDP.

The survey’s labor market differential, derived from data about respondents who think jobs are hard to get and those who think jobs are plentiful, was the best in 16 years. The labor market is close to full employment with the unemployment rate at just 4.3 percent.

The Case-Shiller home price index of 20 metro areas rose 5.7% in June after a similar increase in May. An shortage of homes available and strong demand are pushing up prices. Furthermore, mortgage rates remain extremely attractive and have fallen to year to dates lows in recent weeks.

As long as the stock market, job and real estate remain on track as we expect them to, consumers will continue to spend and they will drive the US growth forward for the rest of the year.