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A key measure of US consumer confidence rose to a five-month high in September as personal incomes rose and gasoline prices fell.
The Conference Board reported that the Consumer Confidence Index rose to 108.0 from August’s revised 103.6.
“Consumer confidence improved for the second month in a row in September, especially supported by falling employment, wages and gasoline prices,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a press release. rice field. “The Current Status Index rose again after falling from April to July. The Expectations Index also improved from its summer lows, but recession risks remain. The decline in the price of gasoline pumps is the main cause, and it is now at the lowest level since the beginning of the year.
“On the other hand, intention to buy a home is down, but intention to buy was mixed with intention to buy a car and big-ticket appliances,” Franco added. “The latter undoubtedly reflects rising mortgage rates and a cooling housing market. Looking ahead, improving confidence may bode well for consumer spending in the final months of 2022. However, rising inflation and interest rates remain strong headwinds to near-term growth.”
At the same time, another metric that measures consumer mood also improved in September, albeit slightly. The University of Michigan reported that the Consumer Sentiment Index rose from his 58.2 in August to his 58.6 in September.
“Durables buying conditions and one-year economic outlook continued to rise from their very low early summer readings, but these gains were largely offset by a modest decline in the long-term outlook for the economy. University consumer research, stated in a press release.
“Median inflation expectations this year fell to 4.7%, the lowest since September last year,” Su added. “The median long-term inflation expectation was 2.7%, falling below the 2.9% to 3.1% range for the first time since July 2021. It is likely to remain relatively volatile for several months and is unlikely to abate in the face of continued global pressure on inflation.”
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U.S. Department of Commerce
reported that consumer spending rose 0.4% in August. Personal income rose by 0.3%.
“The near-term outlook remains conservative at best,” Scott Hoyt, senior economist at Moody’s Analytics, told Reuters. “If interest rates rise, it will make new borrowing more expensive, undermining spending on big-ticket items typically purchased on credit.”
Inflation was higher in August. The personal consumption expenditure price index, which excludes the volatile food and energy categories, rose 0.6%. The core PCE price index rose 4.9% year-over-year.
PCE is the inflation gauge recommended by the Federal Reserve.
The Conference Board reported that the leading economic index fell 0.3% to 116.2 in August after falling 0.5% in July.
Ataman Ozildirim, senior director of economics at The Conference Board, said in a press release: “Among the constituents of the index, only initial unemployment claims and yield spreads have contributed positively over the past six months, although the contribution of yield spreads has narrowed recently.
“Furthermore, labor market strength is expected to continue to ease in the coming months,” added Ozyildirim. “Indeed, the average working week in manufacturing has shrunk in four of the last six months, a notable sign as companies cut hours before cutting their workforces. Economic activity is likely to continue to decelerate and contract more broadly across the U.S. economy, with the Federal Reserve accelerating monetary policy to counter inflationary pressures. The Conference Board is predicting a recession in the next few quarters.”
Small business climate across the country improved in August. The National Federation of Independent Business reported that the small business optimism index rose 1.9 points to 91.8 for him, well below its 48-year average of 98.
29% of our member company executives say inflation is the single most important issue in running their business. That’s down 8 percent from July.
“While the small business economy is still recovering from the pandemic, inflation remains a serious problem for owners across the country,” NFIB chief economist Bill Dunkelberg said in a press release. manages rising costs of utilities, fuel, labor, consumables, materials, rent and inventory to protect revenue Labor shortages are impacting small business productivity , owners are raising wages to attract better workers.”
49% of owners report difficulty filling vacancies. That percentage hasn’t changed since July. A net 46% of owners reported a pay raise in his one month. It was down 2% from July.
Domestic homebuilder confidence fell for the ninth month in a row in September. The National Association of Home Builders reported that the NAHB/Wells Fargo Home Market Index fell three points to 46.
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“With high mortgage rates and high home prices making it financially impossible for many households to buy new homes, many consumers are staying on the sidelines, so many markets Buyer traffic is weak in GA,” Savannah, GA said in a press release. “In another indicator of a weakening market, 24% of his builders report lower home prices, up from 19% of him last month.”
NAHB Chief Economist Robert Dietz added: 6%, the highest level since 2008. In this soft market, more than half of the builders surveyed reported using incentives such as mortgage rate buydowns, free equipment and markdowns to boost sales. “
All three HMI component indices fell in September. The index, which measures current sales, fell three points to 54. The index, which tracks sales projections over the next six months, dropped one point to 46. The index, which measures prospect traffic, dropped one point to 31.
A number above 50 indicates that more builders consider the conditions to be good rather than bad.
The Department of Commerce reported that new home sales surged 28.8% in August to reach a seasonally adjusted annualized rate of 685,000. New home sales fell 14% through August despite gains.
The median selling price was $436,800, up 8.2% from the same month last year.
Existing home sales fell for the seventh straight month in August. Sales fell 0.4% to a seasonally adjusted annual rate of 4.8 million, according to a report by the National Association of Realtors.
NAR Chief Economist Lawrence Yun said in a press release: “The softness in home sales reflects higher mortgage rates this year. I am doing well.”
The NAR also reports that the median resale home price was $389,500 in August, marking the 126th consecutive month of increases. According to NAR, this is the longest-running record on record.
This article was originally published in the November 2022 issue.
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