US: Sharp improvement in consumer confidence – Wells Fargo
|Data released on Tuesday in the US showed a more pronounced than expected improvement in Consumer Sentiment in September. According to analysts at Wells Fargo, falling gasoline prices and a still-tight labor market are the main reasons for the rebound. They warn that as inflation persists and the Federal Reserve lifts rates to combat it, they don’t see confidence approaching pre-pandemic levels.
Key Quotes:
“The near five-point gain in consumer confidence in September lifted the index to 108.0. This marks the highest level in five months, and in conjunction with the sizable gain in August, puts the index 12.7 points higher than where it stood just two months ago.”
“The state of the labor market is of particular interest for the Confidence survey. Most measures of labor demand have shown some signs of topping out, with job openings and hiring plans moving sideways in recent months.”
“Still-elevated inflation and the aggressive tightening path from the Federal Reserve to combat it will likely weigh on consumers financial prospects. The recent gain in confidence may be supportive of spending in the near-term, but as long as inflation persists and risks of recession remain confidence is unlikely to return to pre-pandemic levels.”
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