Still below benchmark, but well above recession-era lows
Consumer confidence, down in the dog days of August, dramatically improved in September, according to the Conference Board Consumer Confidence Index released Tuesday.
The index improved to a better-than-forecast 70.3, up from 61.3 the previous month, and a seven-month high. In addition, the Conference Board Expectations Index increased from 71.1 to 83.7, while the Present Situation Index rose from 46.5 to 50.2.
The Conference Board index has seesawed all year. It fell in January, rebounded in February, posted four consecutive months of declines, rose in July, and then fell to its lowest level since November 2011.
An index reading of 90--indication of a healthy economy—has not been reached in almost five years, but it is a substantial improvement over the unprecedented low of 25.3 reached in February 2009.
Consumers were more positive in their assessment of current conditions, in particular the job market, and considerably more optimistic about the short-term outlook for business conditions, employment and their financial situation,” observed Lynn Franco, Director of Economic Indicators at the Conference Board, in a statement. “Despite continuing economic uncertainty, consumers are slightly more optimistic than they have been in several months.”
Consumers were more upbeat this month about business conditions. Those who described them as “good” ticked upward from 15.3 percent to 15.5 percent, while those expressing they were “bad” declined from 34.4 percent to 33.3 percent. Those saying jobs are “plentiful” rose from 7.2 percent to 8.3 percent, while those claiming they are “hard to get” edged down from 40.6 percent to 39.9 percent.
Consumers also have an improved short-term outlook. Those expecting business conditions to improve over the next six months increased from 16.7 percent to 18.2 percent, while those who anticipated them to worsen decreased from 17.6 percent to 13.8 percent. The proportion of consumers expecting an increase in their incomes edged up from 16 percent to 16.3 percent.
Analysts cite rising home values and higher stock prices as factors in the improvement in consumer confidence.
A new survey of affluent households conducted by Millionaire Corner found more cautious optimism. Just over half (52 percent) consider they are better off financially now than a year ago, while 48 percent said they were not.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.