U.S. Consumer Confidence increased in September, following a large improvement in August. The Conference Board Consumer Confidence Index now stands at 138.4 vs 132.2 expected (1985=100). This is up from 134.7 in August. The Present Situation Index improved marginally from 172.8 to 173.1, while the Expectations Index surged from 109.3 last month to 115.3 this month.
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was September 14.
“After a considerable improvement in August, Consumer Confidence increased further in September and hovers at an 18-year high,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “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.”
Consumers’ assessment of current conditions held steady in September. Those stating business conditions are “good” increased from 40.5 percent to 41.4 percent, while those saying business conditions are “bad” declined marginally from 9.3 percent to 9.1 percent. Consumers’ assessment of the labor market was somewhat more favorable. Those claiming jobs are “plentiful” increased from 42.3 percent to 45.7 percent, but those claiming jobs are “hard to get” increased from 12.1 percent to 13.2 percent.
Consumers’ optimism about the short-term outlook improved considerably in September. The percentage of consumers anticipating business conditions will improve over the next six months increased from 24.4 percent to 27.6 percent, while those expecting business conditions will worsen declined, from 9.9 percent to 8.0 percent. Consumers’ outlook for the labor market was also more upbeat. The proportion expecting more jobs in the months ahead increased from 21.5 percent to 22.5 percent, while those anticipating fewer jobs decreased from 13.2 percent to 11.0 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 25.4 percent to 22.6 percent, but the proportion expecting a decrease declined marginally, from 6.9 percent to 6.5 percent.
Why Markets Care About Conference Board Consumer Confidence Index (CCI)
The Conference Board (CB) publishes the Consumer Confidence Index (CCI), at 10 a.m. ET on the last Tuesday of every month.
It measures Level of a composite index based on surveyed household.
The usual effect is that ‘Actual’ greater than ‘Forecast’ is good for the dollar and vice versa.
The Consumer Confidence Index is derived a survey of about 5,000 households which asks respondents to rate the relative level of current and future economic conditions including labor availability, business conditions, and overall economic situation. The Consumer Confidence Survey reflects prevailing business conditions and likely developments for the months ahead. This monthly report details consumer attitudes and buying intentions, with data available by age, income, and region.
The Conference Board Consumer Confidence Index (CCI) is a barometer of the health of the U.S. economy from the perspective of the consumer. The index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income. The Consumer Confidence Index and its related series are among the earliest sets of economic indicators available each month and are closely watched as leading indicators for the U.S. economy.
Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity.
Other Economy News: Richmond Manufacturing Index
Fifth District manufacturing activity was robust in September, according to results of the most recent survey from the Federal Reserve Bank of Richmond. The composite index rose from 24 in August to 29 in September, buoyed by increases in shipments and new orders, while the index of the third component, employment, dropped. Survey respondents were optimistic, expecting growth to continue in the next six months.
The employment index fell in September but remained positive, while growth in wages and the average workweek expanded. Manufacturing firms continued to struggle to find employees with the skills they needed, and they expect this difficulty to continue in the coming months.
Firms reported faster growth in both prices paid and prices received in September, after price growth had slowed in August. Growth in prices paid continued to outpace growth in prices received. However, firms anticipate slowing of growth in prices paid and accelerated growth of prices received to narrow the gap in the near future.