U.S. consumers viewed the economy with increased optimism in August, hinting at a strong jobs report for the month.

The Conference Board, a private research group, said its index of consumer confidence rose to 92.4 in August from a revised 90.3 in July (first reported as 90.9). The August index is the highest since October 2007, before the recession started. Economists surveyed by The Wall Street Journal had forecast the index would fall to 88.5.

The present situation index, gauging consumers' assessment of current economic conditions, jumped to 94.6 from a revised 87.9 in July (originally 88.3).

Consumers who own homes got more goods news: The S&P Case-Shiller report said home prices nationwide increased 6.2% in the year through June.

The Conference Board survey also showed consumers more upbeat about the labor markets. Some 18.2% of consumers say they think jobs are "plentiful," up from 15.6% in July and the highest reading since early 2008. Another 30.6% think jobs are "hard to get," down from 30.9% saying that last month.

The difference between the two readings narrowed again in August, suggesting further improvement in the employment report to be released Sept. 5.

Getty Images Consumers are becoming notably more optimistic about current labor market progress, consistent with the decline in the unemployment rate," said Gennadiy Goldberg, U.S. strategist at TD Securities.However, the share of respondents anticipating more jobs in the future fell to 17.0% in August from 18.7% a month ago, while the share anticipating fewer jobs also declined, to 15.8% from 16.6%.

But rising confidence hasn't produced stronger spending. Even for people with jobs, pay raises remain minimal and barely pacing inflation. Small wage gains have held back spending.

Worse still, the board survey shows households don't expect much change in the situation. In August, 15.5% of households expected their earnings would rise in the next six months, down from 17.7% saying that in July and the lowest reading since March.

Consumer expectations for economic activity over the next six months fell to 90.9 after that index jumped to a revised 91.9 in July from 86.4 in June. The July expectations index was first reported as 92.7.

Consumer spending is vital to the U.S. economy, accounting for about two-thirds of economic activity.

Kathleen Madigan WSJ.com The Recovery Accelerates

The U.S. economy's second-quarter rebound was more robust than previously estimated and corporate profits surged, putting the recovery back on track as it ended its fifth year.

Gross domestic product, the broadest measure of goods and services produced across the economy, grew at a seasonally adjusted annual rate of 4.2% in the second quarter when adjusted for inflation, the Commerce Department said Thursday.

The agency had previously estimated the second quarter's growth at 4%, relying on incomplete data for international trade, inventories and other sectors. Economists surveyed by The Wall Street Journal had expected growth for the second quarter to be marked down to a 3.8% pace.

"On balance, today's revisions, though small, should be seen as positive news for the growth outlook and make us more confident in our projection of continued solid growth" in the second half of 2014, BNP Paribas economist Laura Rosner said in a note to clients.

Ben Leubsdorf The Wall Street Journal Demand for Homes Grows

The number of contracts signed to buy previously owned homes rose in July, a sign that steady job growth is supporting a rebound in housing demand.

An index of pending home sales, reflecting purchases under contract but not yet closed, rose 3.3% to 105.9 in July from June, the National Association of Realtors said Thursday. That was a bigger gain than the 0.6% rise forecast by economists and placed the index comfortably over the 100 level that the trade group says indicates "normal" sales activity.

Pending home sales have now risen four of the past five months, though the index remains 2.1% below its level from a year ago. A regional breakdown of the July data showed sales rising in the Northeast, South and West, though they fell in the Midwest.

"While housing-market data has remained somewhat choppy, the housing sector recovery continues to chug along" at a reasonable rate, says TD Securities strategist Gennadiy Goldberg.

The latest report showed sales of existing homes, which account for around 90% of the market, continuing to gain steam after softening in late 2013 and early 2014. A rise in mortgage rates and then unusually harsh winter weather had helped to derail a housing-sector recovery that began in 2011.

Jonathan House WSJ.com Bank Lending Expands

U.S. banks increased their loan balances in the second quarter of 2014 by levels not seen since before the financial crisis, offering evidence of a pickup in lending as the economy slowly recovers.

The Federal Deposit Insurance Corp. said banks' loan and lease balances grew by $178.5 billion to $8.11 trillion, a 2.3% increase over the previous quarter and the largest quarterly jump since the last quarter of 2007. Commercial and industrial loans, residential mortgages, credit-card balances, and auto loans contributed to the growth, the agency said in its quarterly report of banks' health.

The FDIC also said the banking industry continued to recover from the financial crisis, though banks are still having trouble boosting revenues in a low-interest-rate environment. Banks as a whole recorded second-quarter net income of $40.2 billion, the FDIC said, a 5.3% increase from a year earlier. The FDIC said that of the 6,656 U.S. financial institutions, the number on its "problem" list dropped to 354, the smallest count in five years.

Ryan Tracy The Wall Street Journal Nonbank Mortgages Surge

Nonbank lenders made almost a quarter of all mortgage loans in the first half of the year, the highest level since at least the financial crisis, according to data on the top-30 mortgage originators from industry newsletter Inside Mortgage Finance.

Mortgage lending at big banks such as Wells Fargo & Co. and J.P. Morgan Chase has dropped more quickly than the rest of the industry in the wake of large mortgage-related legal settlements, new banking standards that require lenders to carry more capital, and increased scrutiny from regulators.

Quicken Loans, the largest mortgage lender outside traditional banks, made $24.3 billion of loans in the first half, putting it on a par with Bank of America and ahead of Citigroup, according to Inside Mortgage Finance.

The rise of nonbank lenders is good news for consumers who otherwise might not be able to get a bank loan in the current environment. For banks, this marks a retreat from a business that used to be very profitable but has turned into a legal and financial headache since the crisis.

Joe Light The Wall Street Journal Orders for Durables Jump

Orders for big-ticket manufactured goods jumped to a record in July thanks to a surge in aircraft purchases, while underlying gauges of demand indicated strong momentum in broad business spending.

Purchases of durable goods--products like airplanes, cars and heavy machinery that are designed to last at least three years--rose a seasonally adjusted 22.6% to $300.1 billion in July from the prior month, the Commerce Department said Tuesday. That was the sharpest increase and highest level in a data series dating back to 1992. Economists surveyed by The Wall Street Journal had forecast a 7.5% increase over June.

J.H. The Wall Street Journal Farm Incomes Set to Fall

U.S. farm incomes are expected to fall 13.8% this year to the lowest level in four years as record harvests push down prices for key crops, the U.S. Department of Agriculture said.

Federal forecasters projected net farm income would slide to $113.2 billion from an estimated $131.3 billion in 2013, which was the highest since 1973 on an inflation-adjusted basis.

The projected decline is narrower than the 27% drop the USDA forecast in February. The change is due largely to an improved outlook for livestock farmers, who are benefiting from record prices for beef and pork as well as low prices for corn and other grains used in animal feed. The USDA said on Tuesday that it expects livestock farmers' receipts to rise 15% this year, compared with a February projection of a 0.7% rise.

Jesse Newman The Wall Street Journal Fewer Accept Pay Cuts

More Americans are bouncing back after losing their jobs, and fewer are accepting a pay cut as the price of returning to work. Some 9.5 million people lost their jobs between January 2011 and December 2013, including 4.3 million who lost jobs they had held for at least three years, the Labor Department said Tuesday in its biennial survey of displaced workers. As of January 2014, 61% were back at work.

By comparison, less than half of the 15.4 million workers who lost their jobs from 2007 through 2009, during the recession years, were re-employed at the beginning of 2010.

B.L. Real Time Economics Blog WSJ.com Like Old Times

Former Federal Reserve Chairman Ben Bernanke, a prominent student of the Great Depression, says the 2008 financial crisis was actually worse than its 1930s counterpart.

Mr. Bernanke is quoted making the statement in a document filed on Aug. 22 with the U.S. Court of Federal Claims as part of a lawsuit linked to the 2008 government bailout of insurance giant American International Group.

"September and October of 2008 was the worst financial crisis in global history, including the Great Depression," Mr. Bernanke is quoted as saying in the document. Of the 13 "most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two."

Former Treasury Secretary Timothy Geithner is quoted in the document offering a similarly apocalyptic assessment. From Sept. 6 through Sept. 22, the economy was essentially "in free fall," he said.

Pedro Nicolaci da Costa Real Time Economics Blog WSJ.com