In the aftermath of Hurricanes Harvey and Irma, consumer confidence dropped – but not quite as much as economic observers anticipated.
The economists’ consensus called for the September consumer confidence index to fall from 120.4 in August – the highest reading in five months – to 119.5. The actual reading was 119.8. Agnel Philip of Bloomberg reported August’s reading was the “second-highest level since 2000.”
Allen Sykora of Kitco News observed gold was “neither hurt nor helped” by the index.
The consumer confidence index, which is issued monthly by the Conference Board, measures consumer optimism on the economy. It is calculated based on 5,000 household surveys that elicit opinions on how things are and how things are expected to be in the next six months.
“Consumer confidence decreased slightly in September after a marginal improvement in August,” concluded Lynn Franco, the Conference Board’s director of economic indicators.
Much of the decline was attributable to the hurricanes, Lucia Mutikani of Reuters reported, “and home sales dropped to an eight-month low in August, supporting the view that the storms would hurt economic growth in the third quarter.”
But John Engle, president of Chicago-area family office merchant bank Almington Capital, said the “slight dip” in consumer confidence was not surprising.
“In fact we can take this as a somewhat positive sign of overall economic health,” he said, “given how muted the dip has been despite the headwinds.”
Alex Doubet, CEO of Texas-based DoorHomes.com, was optimistic.
“Despite a slight tick down from Hurricanes Irma and Harvey,” Doubet said, “consumer confidence continues to be near a historic high over the past decade. As the memories of the hurricanes fade and consumers in Texas and Florida are able to begin rebuilding their lives, expect continued high rates of consumer confidence.”
The consumer confidence index had good news for job seekers.
The labor market differential, which is reached by comparing responses from those who believe jobs are difficult to find with those who believe jobs are abundant, dropped from 16.0 to 14.5, and the results showed an uptick among those who expect to see their incomes go up, from 19.9% to 20.5%.
“Just 18.1% of respondents told that Conference Board that jobs were "hard to get" in September – the lowest share since August 2001,” reported Paul Wiseman of The Associated Press.
At 8.3%, there was no change in the number expecting to see their incomes go down.
