Lower mortgage rates, steadier home values and a rising stock market appear to have boosted consumer confidence leading into the holidays, according to the nation’s most closely watched consumer confidence measures.
The Conference Board’s Consumer Confidence Index increased to 70.3 in September, the highest level in seven months, as consumers became slightly more optimistic in their near term outlook. The index had declined to 61.3 in August.
“Consumers were more positive in their assessment of current conditions, in particular the job market, and considerably more optimistic about the short-term outlook for business conditions, employment and their financial situation” said Lynn Franco, director of economic indicators at The Conference Board. “Despite continuing economic uncertainty, consumers are slightly more optimistic than they have been in several months.”
The Thomson Reuters/University of Michigan Index of Consumer Sentiment rose 5.4 percent to 78.3, which was 31.6 percent higher than September, 2011. “The improvement was due to a reduction in their debt levels and an increase in the value of their assets, primarily because of rising stock prices and home values,” said Chief Economist Richard Curtin.
Both indices had plunged in August, 2011 as consumers reacted to budget brinksmanship in Washington. The declines prompted concerns that consumers would pull back on holiday spending and trigger a double-dip recession. Instead, holiday spending rose 4.1 percent, according to estimates by the National Retail Federation.
