With a strong labor market and expectations for more growth in the economy, consumer confidence in the U.S. reached an 18-year high in September.
According to a report in Reuters, citing the Conference Board, the consumer confidence index jumped to a reading of 138.4 in September, up from 134.7 in August, marking the best reading since September of 2000. What’s more, the index is near its all-time high of 144.7, which was also in 2000.
In an interview with Reuters, Chris Rupkey, chief economist at MUGF, said the big question is what is going to happen in the future when trade tariffs start to have an impact. Reuters noted that economists had expected the consumer confidence index to decline to 132 in September from 133.4 in August.
Despite the trade war with China in September, consumers’ view of the labor market increased during the month of September, even with economists warning that the tariffs could result in job losses and an increase in prices for consumers. Earlier this week, President Trump’s White House slapped China with tariffs on $200 billion more of goods coming into the country. That comes on the heels of $50 billion in tariffs on Chinese products. China retaliated by imposing tariffs on $60 billion of products coming in from the U.S.
Consumers don’t seem too concerned with the increasing trade tensions between the U.S. and China, a sentiment shared by some economists. Reuters noted that some think the tight labor market and rising wages will offset any impact from the trade war. Roiana Reid, an economist at Berenberg Capital Markets, told the publication that consumers may instead choose to purchase goods that aren’t impacted by the tariffs, resulting in no impact to their wallets.
The data is just the latest positive information about the economy coming out in recent days. Reuters pointed to the gross domestic product (GDP), which increased at a 4.2 percent annualized rate in the second quarter. The growth estimates for the third quarter are higher than a 3.0 percent pace, noted the report.