In addition to the increase in consumer confidence, real GDP increased 1.4 percent in the second quarter of 2016, and new home sales are up 20.6 percent year over year.
Consumer confidence rose again in September to 104.1, up from 101.8 in August. It is now at its highest level since the recession, according to the Consumer Confidence Board.
“Consumers’ assessment of present-day conditions improved, primarily the result of a more positive view of the labor market. Looking ahead, consumers are more upbeat about the short-term employment outlook, but somewhat neutral about business conditions and income prospects. Overall, consumers continue to rate current conditions favorably and foresee moderate economic expansion in the months ahead,” said Lynn Franco, Director of Economic Indicators at The Conference Board.
The Present Situation Index rose from 125.3 to 128.5 and the Expectations Index increased from 86.1 to 87.8.
Consumers stating business conditions are “good” decreased from 30.3 percent to 27.4 percent; however, those saying business conditions are “bad” also declined, from 18.2 percent to 16.2 percent. Those stating jobs were “plentiful” increased from 26.8 percent to 27.9 percent and those claiming jobs are “hard to get” declined from 22.8 percent to 21.6 percent.
The percentage of consumers expecting business conditions to improve over the next six months decreased from 17.6 percent to 16.5 percent; however, those expecting conditions to worsen also declined from 11.4 percent to 10.2 percent.
The proportion of consumers expecting more jobs in the months ahead increased from 14.4 percent to 15.1 percent and those anticipating fewer jobs declined from 17.5 percent tot 17.0 percent. The percentage of consumers expecting their incomes to increase declined from 18.5 percent to 17.1 percent; however, the proportion expecting a decline decreased from 11.0 percent to 10.3 percent.
New home sales
Sales of new single-family houses were at a seasonally adjusted annual rate of 609,000 in August. This is 7.6 percent below the revised July rate of 659,000 but is 20.6 percent above the August 2015 estimate of 505,000. This year-over-year increase is a sign that the recent record highs in builder confidence are for a good reason.
The median sales price of new houses sold in August 2016 was $284,000 and the average sales price was $353,600. The seasonally adjusted annual estimate of new houses for sale at the end of August 2016 was 235,000, which represents a supply of 4.6 months at the current sales rate.
Real gross domestic product increased an annual rate of 1.4 percent in the second quarter of 2016, according to the “third” estimate by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.8 percent.
The general picture of economic growth remains the same. The most notable change from the second to third estimate is that nonresidential fixed investment increased in the second quarter; in the previous estimate, nonresidential fixed investment decreased.