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United States consumer confidence jumped to 101.8 in September, The Conference Board reported on Tuesday, September 29, ending months of decline with a 15-point-plus gain from August despite no new federal stimulus.
Indices measuring consumers’ expectations for present and future conditions also improved, the research firm said, as did outlooks about the labor market and general business conditions.
Confidence among consumers in the United States has wavered in recent months as the country grapples with the world’s worst coronavirus outbreak.
The economy has also been hampered by the deadlock in Congress over another stimulus package after key provisions of the $2.2-trillion CARES Act expired in July.
On Tuesday, a top aide to Democratic House Speaker Nancy Pelosi said the lawmaker had spoken for the second day in a row with Treasury Secretary Steven Mnuchin, and the two agreed to continue negotiating, raising hopes the impasse could end.
The September surge in consumer confidence came as a surprise to analysts, who had been expecting a minor rise from the indicator’s upwardly revised 86.3 level in August.
Ian Shepherdson of Pantheon Macroeconomics noted that September was the biggest single-month jump in 17 years, and “nationally, the story probably is that people reacted both to the surge in stock prices in August, culminating in the COVID-era peak on September 2, and the unexpectedly huge drop in unemployment last month,” when the rate fell to 8.4% from 10.2% in July.
The Conference Board said the Present Situation index measuring consumers’ assessment of current conditions rose to 98.6 from 85.8 in August, while the Expectations Index tracking assessments of short-term business, employment, and income expectations shot up more than 17 points to 104.0.
Even with Labor Department data showing new weekly jobless claims still hovering well above their worst single week of the 2008-2010 global financial crisis, the survey found the share of consumers saying jobs were “plentiful” rising slightly in September to 22.9%, while those saying work is “hard to get” fell to 20% from 23.6%.
Consumers saying business conditions are “good” increased to 18.3%, while those saying they are “bad” decreased markedly to 37.4% from 43.3%.
Regarding the outlook for the next 6 months, the survey found the share of consumers expecting business conditions to improve up to 37.1% in September, a gain of nearly 7 percentage points from August, while the share of those expecting them to worsen declined.
Labor market expectations were even more positive, with 33.1% expecting more jobs in the months ahead, up slightly from August, while the share expecting fewer jobs fell back to 15.6%.
The data “should support consumer spending in the coming months,” Kathy Bostjancic of Oxford Economics said.
But she warned that if expanded unemployment payments included in the CARES Act expire, that “could serve as a strong countervailing force.” – Rappler.com