Consumer Confidence Rebounds Nicely on Lower Gasoline Prices

Lower oil prices caused the University of Michigan consumer confidence to leap higher. The market had looked for the preliminary September reading to hold close to the final August reading at a depressed 63. Instead the index soared to 73.1, a full ten point gain. This reading is still above the 85.6 average of last year, but is a clear improvement. Most of the improvement was in the outlook, which rose to 70.9 from 57.9, instead of the current conditions which rose to 76.5 from 71 in August. Also of note, inflation expectations plummeted. One year expectations fell to 3.6% from 4.8% in August. Five year expectations eased to 2.9% from 3.2%. Both have fallen back to their lowest levels since last Feb/March.