Consumer Confidence Unexpectedly Improves, Is This The Turning Point?

U.S. consumer confidence improved in September as inflation expectations fell to a six-month low, the Conference Board said on Tuesday, though it noted its survey did not capture all the latest events in the financial crisis.

The Conference Board said its index measuring consumers' mood rose to 59.8 in September from an upwardly revised 58.5. August was originally reported at 56.9.

The result for September was above economists' expectations for a reading of 55.5, according to a Reuters poll. Their 71 forecasts ranged from 50.0 to 65.3.

However, the cut-off date for this survey was September 23, which may mean that it did not fully reflect the effects of the latest turmoil in financial markets.

"September's increase in the Consumer Confidence Index was due solely to an improvement in the short-term outlook," the survey quoted Lynn Franco, director of the Conference Board Consumer Research Center, as saying.

"However, these results did not capture all of the tumultuous events in the financial sector this month and until the dust settles a bit more, we will not know the full impact on consumers' expectations."

The overall consumer confidence index dates back to 1967. Its lowest reading ever was 43.2, which it hit in December 1974.

 

 

The gauge of consumers' inflation expectations fell to 6.2 percent from August's downwardly revised 6.6 percent. That was the lowest since 6.1 in March.

Consumers' evaluation of their present situation fell to 58.8 -- the lowest since October 1993 -- from 65.0 in August.

The gauge of expectations rose to 60.5 -- the highest in eight months -- from 54.1. Consumers' estimation of the labor market also deteriorated.

The "jobs hard to get" index rose to 32.8 from 31.7 and the "jobs plentiful" gauge fell to 12.2 from 13.5.