Following positive numbers in August The Conference Board, a business research group, said on Tuesday that its consumer confidence index rose to 103 in September from 101.3 in August.
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Consumer confidence increased in September by 1.7 points, following a sharp rebound in August. “Thus, while consumers view current economic conditions more favorably, they do not foresee growth accelerating in the months ahead”. At the same time, 10.1 percent predict lower incomes in the months ahead.
The report also said the expectations index edged down to 91.0 in September from 91.6 in August, as optimism about the short-term outlook was little changed.
Consumers were mixed somewhat about the overall job market.
Ultimately, the current conditions component increased by 5 points over the prior month to a reading of 121.1, which is the best reading of the recovery since September 2007.
Consumers saying business conditions are “good” rose to 28.0 percent from 23.7 percent, while those saying conditions are “bad” dipped to 16.7 percent from 17.8 percent.
Consumer expectations regarding inflation in the next 12 months increased from 4.9% during August to 5.2% during September.
The improvement in consumer confidence in September is a pleasant surprise, given recent uncertainty surrounding the global economic outlook and, related to that, falling USA equity prices, according to Josh Nye, economist at RBC Economics.
The percentage of consumers expecting business conditions to improve over the next six months increased from 16.6 percent to 17.9 percent.
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There have been plenty of indications in recent weeks that the consumer is feeling content heading into the fall, but the near-term concern lies in just how optimistic they are about the future. Those stating that jobs were plentiful were up to 25.1% from 22.1%. Home buying intentions improved to their fastest pace of the year so far. While confidence is important, it is not the same thing as spending – which is a direct result of consumer action. “Unlike its University of Michigan [consumer sentiment index] brethren, the Conference Board index is more sensitive to employment not financial markets”.
