Americans are feeling much better about current economic conditions and far more optimistic about the future.
Consumer confidence jumped higher in September after falling lower in August and July, the Conference Board said Tuesday. The Conference Board’s Consumer Confidence Index rose to 101.9, up from 86.3 in August.
That easily exceeded expectations. Economists had forecast only a mild improvement to 88.8.
The August figure was revised up from 84.8, lower than even the April depth of the pandemic lockdowns. The declines in July and August, after a better than expected rise in June, fueled concerns that the economic recovery could be stalling. The September gain indicates the economy has regained its footing.
The index’s gauge of current business and labor market conditions jumped from 85.8 to 98.5, indicating that Americans are feeling much better about the economy than they were this summer.
The expectations component—based on consumers’ short-term outlook for income, business, and labor market conditions—improved by even more, rising from 86.6 in August to 104 in September.
“Consumer Confidence increased sharply in September, after back-to-back monthly declines, but remains below pre-pandemic levels,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “A more favorable view of current business and labor market conditions, coupled with renewed optimism about the short-term outlook, helped spur this month’s rebound in confidence. Consumers also expressed greater optimism about their short-term financial prospects, which may help keep spending from slowing further in the months ahead.”
The rise in consumer views of current conditions was due to an improvement in both assessments of business conditions and the labor market. The percent of consumers saying jobs are “plentiful” rose to 22.9 percent, while the percent claiming jobs are “hard to get” fell to 20.0. In August, more people had said jobs were scarce than plentiful so this is a significant improvement.
The outlook has become much sunnier. The share of consumers expecting business conditions will improve over the next six months rose from 29.8 percent to 37.1 percent, while those expecting business conditions will worsen fell from 20.7 percent to 15.8 percent. Consumers were more positive about the outlook for the labor market. The proportion expecting more jobs in the months ahead increased from 29.9 percent to 33.1 percent, while those anticipating fewer jobs declined from 21.2 percent to 15.6 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase improved from 13.0 percent to 17.5 percent, while the proportion expecting a decrease declined from 16.0 percent to 12.6 percent.