A monthly measure of consumer confidence has climbed to at its highest level since the recession on mostly upbeat assessments of current conditions and expectations for improvement.
“Overall, consumers continue to rate current conditions favorably and foresee moderate economic expansion in the months ahead,” said Lynn Franco, director of economic indicators for the Conference Board.
The business research and membership association reported that its Consumer Confidence Index rose 2.3 points to 104.1 in September. That’s the highest reading since August 2007. Components of the index tracking current conditions and the short-term outlook both advanced.
“Consumers’ assessments of present-day conditions improved primarily as a 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,” Franco said.
The Conference Board bases the Consumer Confidence Index on the results of monthly surveys of U.S. households. Economists closely monitor the index because consumer spending accounts for more than two-thirds of all economic activity in the country.
For September, more optimistic assessments of business and labor conditions pushed up the present situation component of the index 3.2 points to 128.5. That’s also the highest reading since August 2007.
The portion of consumers responding to the survey upon which the latest Consumer Confidence Index was based who described business conditions as “good” fell 2.9 points to 27.4 percent. But the share of those who called conditions “bad” dropped two points to 16.2 percent.
The portion of consumers who said jobs are “plentiful” rose 1.1 points to 27.9 percent. The share of those who jobs are “hard to get” fell 1.2 points to 21.6 percent.
A more upbeat outlook pushed up the expectations components of the index 1.7 points to 87.8, the highest reading in nearly a year.
The share of consumers who said they expect business conditions to improve over the next six months fell 1.1 points to 16.5 percent. But the portion of those who said they anticipate worsening conditions declined 1.2 points to 10.2 percent.
The share of consumers who said they expect more jobs to become available in coming months rose seven-tenths of a point to 15.1 percent. The portion of those anticipating fewer jobs fell a half a point to 17 percent.
While 17.1 percent of consumers said they expect their incomes to increase, down 1.4 percent, 10.3 percent anticipate lower incomes, down seven-tenths of a point.