USA consumer confidence rises in September

“The detailed survey results on business conditions, employment and income expectations show a bit of divergence amongst consumers at the end of Q3, but on balance the Conference Board data support our positive outlook for United States consumption growth”, says Barclays.

The present situation index rose to 121.1 from a 115.8. The expectations component dropped by 60 basis points over August for a reading of 91 in September.

Consumer spending accounts for about 70 per cent of US economic activity. “Consumers’ more positive assessment of current conditions fueled this month’s increase, and drove the Present Situation Index to an 8-year high (Sept. 2007, Index=121.2)”.

WASHINGTON _ Consumer confidence unexpectedly rose in September as a resilient labor market helped Americans shake off the effects of tumbling stock prices. More than 25 per cent of Americans said jobs were plentiful, highest share since September 2007. The reason behind these less-than-favorable expectations was the huge market pullback that has been seen over the course of September. Those who think there will be more jobs in the months ahead was virtually unchanged at 15.0%, while those anticipating fewer jobs rose from 14.5% to 15.8%.

The Labor Department’s broad snapshot of the job market is due out Friday. Over the past year, employers have added 243,000 jobs a month, nearly on pace with the hiring boom of the late “90s”.

Economists expect the business group’s consumer confidence index to slide to 94.3 from a seven-month high 101.5 in August, according to a survey by the financial information firm FactSet. The percentage of consumers expecting business conditions to improve over the next six months increased from 16.6 percent to 17.9 percent, but those expecting business conditions to worsen also increased, from 9.1 percent to 10.3 percent.

“Even if there is no shutdown, political bickering and finger-pointing are downers for consumer confidence”, he said.