Earlier this month we learned that the consumer spending rebound had moderated in August. This was unsurprising due to base effects, the expiration of the $600 unemployment insurance boost (more on this Friday), and various other factors. Slower growth, though, is still growth, and several new reports encouragingly suggest that overall consumption likely remained healthy in September. Updated mobility tracking, for instance, shows that Americans continue to return to the roads and commute at levels in line with or even above the pre-pandemic rate. Much of this is due to a combination of the schools reopening and more people returning to in-person work arrangements. In fact, an estimated 25 percent of office workers have already returned as of September, and some large metropolitan areas have seen a considerably higher pace of in-person reoccupation.
However, recent BAML credit card data implies that more Americans are also leaving their homes to visit restaurants and department stores this month. Another encouraging data point is The Conference Board’s headline consumer confidence index, which surged to 101.8 in September. That is the biggest monthly increase in 17 years and the 6th-largest gain in the 51-year history of this data series. Under the hood the improvements were broad based as surveyed Americans reported greater levels of optimism about both current and future economic conditions. Further, the percentage of consumer respondents saying that jobs are “plentiful” rose to 22.9 percent in September, and those claiming jobs are “hard to get” declined to 20.0 percent. This labor market differential is much better than what was seen during the lockdowns but still well below the pre-COVID peak, and by some measures consistent with a 5-6 percent unemployment rate. Looking ahead, higher proportions of surveyed Americans in September reported that they expect business conditions, job availability, and personal income to all improve during the next six months.
Sources: Apple, WSJ, BAML, The Conference Board, RenMac, FRBSL