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Consumer confidence hits four-month high
Consumer confidence hit a four-month high in September, another sign that Americans are more optimistic about the direction of the economy, a major theme in the presidential election.
Sentiment increased to 78.3 this month, which is lower than a reading earlier this month, from 74.3 in August, according to the final reading for the month in Thomson Reuters/University of Michigan index released Friday.
Consumers are expecting the economy to create more jobs in the year ahead, and their expectations have been boosted by higher stock prices and rising home values.
Still, most anticipate very small wage gains, along with larger price increases driven by higher food prices.
“Consumers anticipate a rocky economic road ahead," said Richard Curtin, Survey of Consumers chief economist.
But consumers have better expectations looking down the road six months, usually a better indicator of spending, with the index increasing to 73.5 from 65.1 in August.
A separate survey from the Conference Board earlier this week showed confidence hitting a seven-month high.
Consumers are seeing a gradually improving housing market with higher prices along with record-low mortgage rates, making home buying more affordable.
Still, the unemployment rate remains above 8 percent, and Congress is creating uncertainty for consumers and businesses, which remain reluctant to pick up hiring until lawmakers deal with the looming fiscal cliff.
A separate report on Friday showed consumers spent more in August but most of that increase was largely due to high gas prices.
The Commerce Department said Friday that consumer spending rose 0.5 percent in August from July, the largest increase since February.
Taking out gas purchases, spending rose only 0.1 percent last month.
Consumer spending represents 70 percent of economic activity, and in the past has driven economic recoveries.
This time around, spending has been slow to bounce back.
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