After hitting a 6-year low last month, consumer confidence bounced back in September, as consumers were more upbeat on outlook for economy and the job market.
The Consumer Confidence Index, reported by the Conference Board, rose 15.5 points from 86.3 to 101.8 in September, the highest level since March 2020 and the largest monthly gain since April 2003. The Present Situation Index jumped 12.7 points from 85.8 to 98.5, and the Expectation Situation Index increased 17.4 points from 86.6 to 104, almost back to February level.
Consumers’ assessment of current business conditions improved in September. The shares of respondents rating business conditions “good” remained rose by 2.3 percentage point to 18.3%, while those claiming business conditions “bad” fell by 5.9 percentage points to 37.4%. Meanwhile, consumers’ assessment of the labor market was also favorable. The share of respondents reporting that jobs were “plentiful” increased by 1.5 percentage points, while those saw jobs as “hard to get” decreased by 3.6 percentage points.
Consumers were optimistic about the short-term outlook. The share of respondents expecting business conditions to improve increased from 29.8% to 37.1%, while those expecting business conditions to deteriorate fell from 20.7% to 15.8%. Similarly, expectations of employment over the next six months were favorable. The share of respondents expecting “more jobs” rose by 3.2 percentage points to 33.1%, while those anticipating “fewer jobs” declined by 5.6 percentage points to 15.6%.
Despite the overall improvement, consumer confidence still remained below pre-pandemic levels and the Present Situation Index suggested that current economic conditions remained weak.
The Conference Board also reported the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home slightly rose to 6.4% in September. The share of respondents planning to buy a newly constructed home increased to 1.4%, and for those who planning to buy an existing home remained at 3%.