Consumer Spending, Confidence Up

Date: September 30, 2015

Data Shows Rise In Spending In August, Unexpected Rise In Consumer Confidence In September

According to the latest Commerce Department data, consumer spending rose 0.4% from July to August, following a similar increase from June to July. The report showed that personal income also grew for the month, up 0.3% from July. Reuters noted that economists it surveyed were expecting a 0.3% increase in consumer spending in August. Spending for durable goods including automobiles rose 0.9%, while spending on utilities rose 0.5%. Prices rose 1.3% excluding food and energy. Overall, RBS Securities economist John Hoff said, “These data underscore the ongoing health of the consumer sector.”

In related news on consumer spending, the latest data from the Conference Board’s monthly Consumer Confidence Index shows US consumer confidence rose slightly in September, up 1.7 points to 103.0 from August’s 101.3 reading. Further, those consumers rating business conditions as “good” rose in September to 28% from 23.7% in August, and those consumers rating conditions as “bad” fell from 17.8% in August to 16.7% in September. Bloomberg Newsreported that a “resilient labor market” allowed “Americans shake off the effects of tumbling stock prices” and boost confidence. A Bloomberg survey of analysts had expected confidence among consumers to fall in September to 96.8. Evercore ISI economist Stan Shipley explained, “Gasoline prices are down and unemployment rates are down. That’s a good combination for consumer confidence.”

What This Means For Small Businesses

Data from multiple sources showing increased consumer spending and confidence is positive news for US small businesses, particularly as many head into the crucial holiday season. The outlook for the rest of the year appears positive, meaning small businesses will benefit from consumers looking to spend, further strengthening overall economic conditions.

Additional Reading

NFIB previously noted results of another monthly consumer confidence survey.

Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.

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