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Economy in Brief

U.S. Consumer Confidence Surprisingly Recovers
by Tom Moeller  September 25, 2012

The Conference Board's Consumer Confidence Index for September jumped 14.7% to 70.3 from 61.3 in August, revised up from 60.6. Consensus had been looking for a m/m decline to 63.0. The latest figure was the highest since February. During the last ten years there has been a 47% correlation between the level of confidence and the three-month change in real PCE.

The expectations component jumped 17.7% to 83.7 which was its highest level since February. A greater 18.2% of respondents thought business conditions would be better in six months. Also, an increased 18.5% thought there would be more jobs and a higher 16.3% expected higher income.

Consumers' reading of the present situation jumped 8.0% m/m to 50.2, its highest level since April. Confidence in the labor market improved greatly as a lessened 38.9% reported that jobs were hard to get, the least since April. An improved 15.5% thought business conditions were good, the most since December.

Expectations for inflation in the next twelve months fell m/m to 5.8% but remained up from the 5.3% low three months ago. The percentage of people looking for higher stock prices ticked up to 27.9% this month while the percent who are bearish fell to it least since May. The percentage of respondents planning to buy a home within six months reversed most of its August gain and the percent planning to buy a major appliance rose to its highest since November.

Headline figures on consumer confidence are carried in Haver's USECON database. The Conference Board's detailed data are found in Haver's CBDB database, and the consensus expectations figure is from Actions Economics, as tabulated in the AS1REPNA database. 

Conference Board (SA, 1985=100) Sep Aug Jul Y/Y % 2011 2010 2009
Consumer Confidence Index 70.3 61.3 65.4 51.5 58.1 54.5 45.2
Present Situation 50.2 46.5 45.9 50.8 36.2 25.7 24.0
Expectations 83.7 71.1 78.4 51.9 72.8 73.7 59.3
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