Consumer Confidence Remained Strong in September, Despite Hurricanes

The Conference Board Consumer Confidence Index declined slightly in September to 119.8, down from 120.4 in August just below the 120.2 median forecast. Still, despite two devastating hurricanes in states that are the nation’s two top economic contributors, consumer confidence is till unusually strong.

The Present Situation Index ticked down from 148.4 to 146.1, while the Expectations Index still rose marginally from 101.7 last month to 102.2. The monthly Consumer Confidence Survey, which is based on a probability-design random sample, was conducted for the Conference Board by Nielsen with a September 18 cutoff date for the preliminary results.

“Consumer confidence decreased slightly in September after a marginal improvement in August,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Confidence in Texas and Florida, however, decreased considerably, as these two states were the most severely impacted by Hurricanes Harvey and Irma. Despite the slight downtick in confidence, consumers’ assessment of current conditions remains quite favorable and their expectations for the short-term suggest the economy will continue expanding at its current pace.”

Consumers’ assessment of current conditions only moderated slightly in September, as those saying business conditions are “good” inched down from 34.5% to 33.9%. Those saying business conditions are “bad” ticked up from 13.2% to 13.8%. Consumers’ views of the labor market was also down but still very upbeat. Those stating jobs are “plentiful” fell from 34.4% to 32.6%. However, those claiming jobs are “hard to get” actually fell from 18.4% to 18.1%.

Consumers’ optimism about the short-term outlook was marginally more positive in September. The percentage of consumers expecting business conditions to improve over the next six months rose slightly from 19.8% to 20.2%, while those expecting business conditions to worsen did tick up from 8.0% to 9.9%.

Consumers’ outlook for the labor market was more favorable than in August, with those expecting more jobs in the months ahead surging from 16.8% to 19.5%. Those anticipating fewer jobs rose only marginally from 13.2% to 13.5%. As it relates to short-term income prospects, the percentage of consumers expecting an improvement gained moderately from 19.9% to 20.5%, while the proportion expecting a decline was virtually unchanged at 8.3%.