NEW YORK - Lower gas prices helped boost September's Consumer Confidence Index, which rose to 104.5, up from an adjusted 100.2 in August, and beating the consensus estimate of 103.
"A more favorable assessment of current conditions coupled with a less pessimistic short-term outlook boosted consumer confidence this month," said Lynn Franco, director of the Conference Board Consumer Research Center here. "However, even though consumers' concerns have eased, there is little to suggest a significant change in economic activity as we enter the final quarter of 2006."
The Conference Board, which conducts the monthly survey with the assistance of research firm TNS, said both components of the index rose from July's levels. The Present Situation Index increased to 127.7 from 123.9, while the Expectations Index rose to 89 from 84.4 last month.
Maury Harris, economist at UBS, wrote in a research note that while the sharp drop in gasoline prices bolstered consumer sentiment in September, the Consumer Confidence Index still "showed a net decline from July."
Harris said the Expectations Index "looks consistent with a trend in real consumption growth of around 3% at an annual rate." He explained that this index correlates more closely with the rate of growth in consumer spending than either the Present Situation or overall confidence indexes.
According to the Conference Board, consumers who said ongoing conditions were "good" in September increased to 27.4% from 26.2%, while those claiming conditions are "bad" fell to 15.4% from 16.6%. On the job front, the sentiment was mixed regarding labor market conditions. Consumers who said jobs are "plentiful" rose to 25.9% from 24.5%, but those claiming that jobs are "hard to get" also inched up to 21.3% from 21.1% last month.
