Consumer Confidence Moved Closer to a New Record High

The Consumer Confidence Index from The Conference Board rose for the fourth month in a row, increasing by 2.6 points to 137.9. The index is constructed so that 1985 equals 100. The index is now at the highest level since September 2000 and just 6.8 points below the all-time record of 144.7 in May 2000 (see chart).

Both components of the index posted gains for the month. The present-situation component rose 6.1 points to 172.8, matching the August result and reaching the highest level since December 2000. This index has posted a remarkable rebound, rising 152 points from a low of 20.2 in December 2009, just after the end of the Great Recession. The expectations component added 2.1 points, taking it to 114.6 from 112.5 in the prior month. The expectations index has been a bit more restrained compared to the present-situation index but has risen sharply from a reading of 102.4 in July 2018 and is now at the highest level since September 2000. The all-time high for the expectations component is 125.8, recorded in April 1967.

Overall, consumer attitudes remain at historically favorable levels, driven by solid gains in income and a tight labor market. Expectations for the future are at historically favorable levels as well. Both suggest support for future gains in consumer spending and overall economic growth.

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Robert Hughes

Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.