The Conference Board’s US consumer confidence index Tuesday surged to a reading of 101.8 in September, the strongest reading since March, from an upward revised 86.3 reading in August.
The Conference Board noted both the current conditions reading and future expectations rose solidly in the month, which should support spending.
Analysts had expected the September index to rise to only 88.8 from the originally reported 84.8 reading in August. The index was at 132.6 in February before the state shutdowns began.
The reading of present situation reading rose to 98.5 in September from 85.8 in August, while the expectations reading jumped to 104.0 from 86.6.
“Consumer Confidence increased sharply in September, after back-to-back monthly declines, but remains below pre-pandemic levels,” said Lynn Franco, the Conference Board’s Senior Director of Economic Indicators, noting improvements in both business and employment conditions.
“Consumers also expressed greater optimism about their short-term financial prospects, which may help keep spending from slowing further in the months ahead,” she added.
The percentage of respondents describing current business conditions as “good” rose to 18.3% from 16.0% in August, while those reporting they were “bad” fell to 37.4% from 43.3%, so the overall picture is still negative, but improving.
Those reporting jobs as “plentiful” ticked up to 22.9% from 21.4%, while those reporting that they are “hard to get” fell to 20.0% from 23.6%. As a result, the gap between the two jobs measures, a closely watched indicator of employment conditions, rose to +2.9 in September from -2.2 in August. This measure was +33.5 a year ago.
Respondents looking for business conditions to improve over the next six months rose to 37.1% from 29.8%, compared with 15.8% who expect conditions to worsen, down from 20.7%.
Those expecting more jobs in the coming months rose to 33.1% from 29.9% in August, while those looking for fewer jobs fell to 15.6% from 21.2%.
Released later in the morning, the Dallas Fed reported a sold gain in its services index to 11.5 in September from 4.7 in August, in line with most of the other regional services measures. The ISM’s monthly data will be released on Monday.
In other data released earlier Tuesday, the advance estimate of trade for August suggested that the full trade gap will widen further when it is released next week.
Also released, early estimates show August wholesale inventories rise by 0.5% and retail inventories by 0.8%. Factory inventories will be released on Friday and an estimate for business inventories can be made at that time.