By Xavier Fontdegloria
U.S. consumer confidence improved in September for a second consecutive month as Americans’ views of the labor market remained positive and concerns over inflation moderated amid further declines in gasoline prices.
Private-research group The Conference Board said Tuesday that its consumer confidence index increased to 108.0 in September from a revised 103.6 in August, the highest reading since April.
Economists polled by The Wall Street Journal expected the index to increase to 104.5.
Jobs, wages and declining gas prices supported the rise in consumer confidence, said Lynn Franco, senior director of economic indicators at The Conference Board.
“Concerns about inflation dissipated further in September–prompted largely by declining prices at the gas pump–and are now at their lowest level since the start of the year,” she said.
The present situation index, which gauges consumers’ assessment of current business and labor market conditions, increased to 149.6 from 145.3. The expectations index, which gauges short-term outlook for income, business and labor-market conditions, rose to 80.3 from 75.8, the data showed.
Consumer confidence can hint at household spending, which is a major growth driver for the U.S. economy. Subdued confidence levels and high inflation have turned consumers more cautious in the last few months, but data showed spending hasn’t been hit significantly even as they face increasing headwinds.
The Conference Board’s index aligns with real-time consumer spending data which has remained pretty resilient as households are still benefiting from a strong labor market and elevated savings, said Matt Orton, chief market strategist at Carillon Tower Advisers.
Consumers’ views on the labor market improved in September, with 49.4% of those surveyed saying jobs are plentiful, up from 47.6% in August. Americans also were more optimistic about the short-term outlook for the labor market, The Conference’s Board data showed.
Purchasing intentions for big-ticket items were mixed, with intentions to buy automobiles and appliances up, while home-purchasing intentions fell amid rising mortgage rates and a cooling housing market, Ms. Franco said.
“Looking ahead, the improvement in confidence may bode well for consumer spending in the final months of 2022, but inflation and interest-rate hikes remain strong headwinds to growth in the short-term,” she said.
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(END) Dow Jones Newswires
September 27, 2022 10:42 ET (14:42 GMT)
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