US consumer confidence approaches all-time high

US consumer confidence approaches all-time high

WASHINGTON: Confidence among American consumers in September rose unexpectedly for the second month in a row, hovering near an 18-year high, according to a survey released on Tuesday (Sep 25).

The survey showed a sharp gain in optimism among consumers, with respondents apparently shrugging off worries about inflation and a trade war with China, and point to continued healthy spending boosting the economy.

The consumer confidence index rose nearly four points to 138.4, with views about current conditions rising modestly but with a six-point surge in expectations to 115.3, according to the Conference Board's monthly report.

Forecasts had called for a modest decline in the closely-watched reading of consumer sentiment.

"The September reading is not far from the all-time high of 144.7 reached in 2000," Lynn Franco, the Conference Board's director of economic indicators, said in a statement.

"Consumers' assessment of current conditions remains extremely favourable, bolstered by a strong economy and robust job growth."

The bump in expectations points to economic growth of higher than three per cent in the remainder of 2018, Franco said.

"These historically high confidence levels should continue to support healthy consumer spending, and should be welcome news for retailers as they begin gearing up for the holiday season," she said.

The cutoff for the survey was September 14, meaning it would not have captured any reaction to US President Donald Trump's latest move to slap tariff on a whopping US$200 billion in additional Chinese imports, almost undoubtedly increasing consumer costs.

But so far confidence measures have appeared undisturbed by trade tensions.

The consumer outlook about the next six months were upbeat, with a growing share of respondents expecting conditions to improve and jobs to become more plentiful.

There was, however, a marginal decrease in the share of people expecting their incomes to increase in the short term.

Source: AFP/de