US: Consumer confidence index was much stronger than expected - RBS
|Research Team at RBS, notes that the US Conference Board consumer confidence index was much stronger than expected in September, rising to 104.1 (consensus 99.0, RBS 99.5) from a modestly upward revised 101.8 reading in August (was 101.1).
Key Quotes
“At 104.1, the September level was the highest reading of the recovery. Encouragingly, consumers’ assessments of the labor market improved in September: A net 6.3% of respondents reported jobs plentiful minus hard to get, up from 4.0% in August. Expectations about the labor market also showed improvement. The percent of respondents anticipating more jobs increased to 15.1% from 14.4% in August; and those anticipating fewer jobs fell to 17.0% from 17.5% in August. The favorable jobs data raises the possibility that the unemployment rate drops in September (after holding steady at 4.9% since June).
The improvement in the confidence in September reflected gains in both the expectations (87.8 in Sep after 86.1 in Aug) and present situation (128.5 after 125.3) components. At 87.8 in September, the expectations index, which tend to correlate better than the headline index with trends in real consumption growth, appeared consistent with real spending trending up at about a 2¾% annual rate (below the actual 4.4%q/q annual rate registered in Q2).
The jump in the overall confidence index stands in contrast with most other measures of confidence (e.g., Univ. of Michigan, TIPP/IBD, and Bloomberg), which all showed flattish-to-slightly weaker performances in September. According to the report: “Consumers’ assessment of present-day conditions improved, primarily the result of a more positive view of the labor market.
Looking ahead, consumers are more upbeat about the short-term employment outlook, but somewhat neutral about business conditions and income prospects. Overall, consumers continue to rate current conditions favorably and foresee moderate economic expansion in the months ahead.” Though less closely watched than other gauges, the 12month ahead expected inflation figure in this report rose from 4.8% to 5.0%. The cut-off for the preliminary results was September 15.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.