Consumer Confidence Approaching an All-Time High
The Conference Board reported Tuesday morning that its consumer confidence index for the month of September rose from a revised reading of 134.7 in August to 138.4. The expectations index jumped from 109.3 to 115.3, and the present situation index rose from 172.8 to 173.1. The consensus estimate for September called for a slight dip to an overall index reading of 131.7.
The assessment of present-day conditions improved again in September. The percentage of consumers who said business conditions are “good” rose from 40.5% to 41.4%, while those claiming business conditions are “bad” declined from 9.3% to 9.1%.
Consumers’ assessment of the September labor market also improved. The proportion stating jobs are “plentiful” increased from 42.3% to 45.7%, and those claiming jobs are “hard to get” rose from 12.1% to 13.2%.
Lynn Franco, director of economic indicators at the Conference Board, said:
After a considerable improvement in August, Consumer Confidence increased further in September and hovers at an 18-year high. The September reading is not far from the all-time high of 144.7 reached in 2000. Consumers’ assessment of current conditions remains extremely favorable, bolstered by a strong economy and robust job growth. The Expectations Index surged in September, suggesting solid economic growth exceeding 3.0 percent for the remainder of the year. These historically high confidence levels should continue to support healthy consumer spending, and should be welcome news for retailers as they begin gearing up for the holiday season.
On the jobs front, expectations for new jobs rose from 21.5% to 22.5% in September, while the number of respondents who expect fewer jobs dropped from 13.2% to 11.0%. Regarding their own income, 22.6% expect an improvement in the short term, down from 25.4% in August. The proportion expecting a decrease in income dipped from 6.9% to 6.5%.
Optimism about the short-term outlook rose sharply in September. The percentage of consumers expecting business conditions to improve over the next six months increased from 24.4% to 27.6%. Those expecting business conditions to worsen declined from 9.9% to 8.0%.
The Conference Board’s Consumer Confidence Survey is based on a probability-design random sample and is conducted for the Conference Board by Nielsen. The index baseline is 1985=100.