WASHINGTON – Americans are feeling more confident this month, a good sign for an economy driven by consumer spending, according to a University of Michigan survey.
The university said Friday that its index of consumer sentiment rose to 90 after dropping to 87.2 in September from 91.9 in August.
Richard Curtin, chief economist for the university’s consumer surveys, says the entire gain was generated by improved spirits among lower-income households. Wealthier consumers were a bit less confident, worried about gyrations in financial markets that reflect deteriorating economic conditions overseas.
Bricklin Dwyer, economist with BNP Paribas, said the overall reading “suggests a relatively healthy level of consumer optimism.”
Households felt more favourably about their financial prospects than at any time since 2007. Their expectations for inflation are at the lowest level in a quarter century.
In its report on third-quarter economic growth Thursday, the Commerce Department said consumer spending rose at a solid 3.2 per cent annual pace from July through September. Curtin said consumers are likely to spend at a healthy pace through 2016.
But they still want to see discounts when they go shopping, he noted.
Some other recent reports are flashing caution about consumers, whose spending accounts for about 70 per cent of U.S. economic activity.
The Commerce Department reported Friday that consumer spending ended the third quarter with a whimper, rising just 0.1 per cent in September, weakest monthly performance since January. And another gauge of consumer spirits — the Conference Board’s consumer confidence index — fell to 97.6 this month from a nine-month high 102.6 in September, the business group reported Tuesday.