Good news: confidence improves again

Wall Street may be in decline. Interest rates may be way up. But here’s some good news: Consumer confidence increased for the second consecutive month, according to data released Tuesday morning.

The New York-based Conference Board’s closely watched Consumer Confidence Index increased to 108.0 (1985=100) in September. That’s up from a reading of 103.6 in August.

The Conference Board’s Present Situation Index also improved, from 145.3 to 149.6

The Conference Board’s senior director of economic indicators Lynn Franco provided this analysis:

“Consumer confidence improved in September for the second consecutive month supported in particular by jobs, wages, and declining gas prices. The Present Situation Index rose again, after declining from April through July. The Expectations Index also improved from summer lows, but recession risks nonetheless persist. 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.

“Meanwhile, purchasing intentions were mixed, with intentions to buy automobiles and big-ticket appliances up, while home purchasing intentions fell. The latter no doubt reflects rising mortgage rates and a cooling housing market. 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.”

Consumers were also more positive about the short-term (six months) business conditions outlook in September.

• 19.3% of consumers expect business conditions will improve, up from 17.3%.
• 21.0% expect business conditions to worsen, down from 21.7%.