Consumer Confidence Shoots Up To Surpass Consensus Range

Headline strength is spectacular in the consumer confidence report yet the details won't be lifting expectations for the September employment report. Confidence shot up to 138.4 to easily surpass Econoday's consensus range in a reading that's the highest in 18 years and now within shot of the all-time record of 144.7 hit during the dotcom sensation of 2000.

The less spectacular result comes from the consumer's assessment of the labor market where those who say jobs are hard to get increased, not decreased, by a sizable 1.1 percentage points to 13.2 percent. This is a very closely watched reading by forecasters and is only marginally offset by a 3.4 percentage point rise to 45.7 percent in those who say jobs are currently plentiful. Another positive is strength in the assessment of business conditions which helped lift the present situation component by 3 tenths to 173.1.

Turning to the assessment of future conditions, those who see their income improving over the next six months declined 2.8 points to 22.6 percent which is offset in part by a 4 tenths decline to 6.5 percent for those who see their income falling. More clearly positive are the assessments of future labor and business conditions which made for a 6.0 point gain in the expectations index to 115.3.

Buying plans for autos are very strong, up 4 tenths to 13.4 percent, and home buying plans are also positive, up 3 tenths to 6.6 percent in what is badly needed good news for the nation's Realtors and home builders. Buying plans for major appliances are strong but down slightly at 52.9 percent.

Sentiment in the stock market is on the rise with bulls up 2.7 percentage points to 42.5 percent and bears decreasing by 1.3 points to 22.4 percent. On interest rates, 68.2 percent see them moving higher and only 6.8 percent lower which is of note given prospects for a Federal Reserve rate hike tomorrow.

This report isn't quite as strong as it looks but it is very very strong and follows the mid-month jump in the consumer sentiment index to suggest a pivot higher this month in consumer spirits. This hints at a pivot higher as well for consumer spending.