U.S. consumer confidence in September rose to the highest level in nine years, a hopeful sign that economic growth will accelerate in coming months.
The Conference Board said Tuesday that its consumer confidence index rose to 104.1, up from 101.8 in August. It was the strongest reading since the index stood at 105.6 in August 2007, four months before the beginning of the Great Recession of 2007-2009.
Private economists had been forecasting the index would drop in September after a strong August reading. Many analysts expected that recent volatility in the stock market and some subpar economic readings on auto sales and manufacturing might lead consumers to feel less confident.
They also thought that increased uncertainty revolving around the presidential campaign might weigh on consumers.
"It appears that steady job gains, low volatility in equity markets and subdued gasoline price pressures are helping consumers' outlooks," analysts at Contingent Macro Research said in a note to clients.
Consumers' views about current economic conditions and expectations about future economic conditions both rose in the survey, a development which economists said should help boost consumer spending and the overall economy in coming months.
"Still solid job growth will continue to support consumer confidence, which will drive economic growth," said Jennifer Lee, senior economist at BMO Capital Markets.
The overall economy, as measured by the gross domestic product, has grown at a lacklustre rate averaging 1 per cent over the past nine months. But forecasters believe GDP growth will accelerate to around 3 per cent in the current July-September quarter.