Consumer Confidence Hits Post-Recession High

The Conference Board, New York, said its Consumer Confidence Index improved further in September, rising to its highest level since the recession.

The Index jumped to 104.1 in September, up from 101.8 in August. The Present Situation Index rose from 125.3 to 128.5, while the Expectations Index improved from 86.1 last month to 87.8.

“Overall, consumers continue to rate current conditions favorably and foresee moderate economic expansion in the months ahead,” said Lynn Franco, Director of Economic Indicators with The Conference Board. “Consumers’ assessment of present-day conditions improved, primarily the result of a more positive view of the labor market. Looking ahead, consumers are more upbeat about the short-term employment outlook, but somewhat neutral about business conditions and income prospects.”

Consumers’ assessment of current conditions improved in September. Those stating business conditions are “good” decreased from 30.3 percent to 27.4 percent. However, those saying business conditions are “bad” declined from 18.2 percent to 16.2 percent. Consumers’ appraisal of the labor market was more positive than last month. Those stating jobs were “plentiful” increased from 26.8 percent to 27.9 percent, while those claiming jobs are “hard to get” declined from 22.8 percent to 21.6 percent.

Consumers’ optimism regarding the short-term outlook was more favorable in September. The percentage of consumers expecting business conditions to improve over the next six months decreased from 17.6 percent to 16.5 percent. However, those expecting business conditions to worsen also declined from 11.4 percent to 10.2 percent.

The report said consumers’ outlook for the labor market was more upbeat than in August. The proportion expecting more jobs in the months ahead increased from 14.4 percent to 15.1 percent, while those anticipating fewer jobs declined from 17.5 percent to 17.0 percent. The percentage of consumers expecting their incomes to increase declined from 18.5 percent to 17.1 percent. However, the proportion expecting a decline decreased from 11.0 percent to 10.3 percent.

“Fundamentals for future consumer spending, including confidence, remain favorable,” said Sam Bullard, senior economist with Wells Fargo Securities, Charlotte, N.C. “As we see it, consumer spending is still poised to remain the primary contributor to U.S. GDP growth over the medium-term.”