The Conference Board’s index of U.S. consumer confidence rose to 101.8 in September, marking the largest monthly gain in almost 17 years. The rebound was comparatively widespread throughout the present situation and expectations sub-indices, although the latter saw a larger rebound. The recovery in sentiment comes after a sudden fall in August, likely due to uncertainty in the midst of a resurgence of COVID-19 cases. Consumers seemed more optimistic regarding the near-term outlook for the economy and labor markets, and also viewed the present situation as most favourable since April of this year.
“In our view, this could reflect the gradual re-opening of the economy and the consistent improvements in the labor market. That said, the consumer confidence index still remains below its pre-COVID-19 levels and has a long road to recovery ahead of it”, said Barclays in a research report.
The Present Situation Index rose 12.7 points to 98.5 in September, as consumers viewed current business and employment conditions as more favourable from a month ago. The labor market differential rebounded into positive territory, though it continues to be a long way off from its pre-Covid-19 levels.
The Expectations Index rose 17.4 points to 104, on optimism over near-term economic conditions. The percentage of consumers expecting business conditions to rebound over the next six months rebounded to 37.1 percent, while those expecting business conditions to worsen or stay the same fell. Consumers’ outlook for the labor market also turned more favourable, as did income expectations.
