Skip to main content

Gains in Consumer Confidence


An important measure of U.S. consumer confidence rose in October for the first time in four months as the nation continued to battle the Delta variant of the virus that causes Covid-19.

The Conference Board reported that its Consumer Confidence Index climbed to 113.8 from a revised 109.8 in September.

“Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the delta variant eased,” Lynn Franco, senior director of economic indicators at The Conference Board, stated in a press release. “While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted. The proportion of consumers planning to purchase homes, automobiles and major appliances all increased in October — a sign that consumer spending will continue to support economic growth through the final months of 2021.”

Nearly half of respondents in the survey said they intended to take a vacation within the next six months — a reflection of the ongoing resurgence in consumers’ willingness to travel and spend on personal services.

Meanwhile, a different reading of consumer mood was slightly lower in October. The University of Michigan reported that its Consumer Sentiment Index fell to 71.7 from 72.8 in September.

“The positive impact of higher income expectations and the receding coronavirus has been offset by higher rates of inflation and falling confidence in government economic policies,” Richard Curtin, chief economist of the university’s Surveys of Consumers, stated in a press release. “Consumers not only anticipated the highest year-ahead inflation rate since 2008 in the October survey, consumers also expressed greater uncertainty about the year-ahead inflation rate than any time in nearly 40 years.”

Curtin added that this was the first major spike in inflation uncertainty recorded outside of a recession.

The U.S. Department of Commerce reported that consumer spending rose 0.6 percent in September, but adjusted for inflation that gain was only 0.3 percent. Shortages of goods due to continuing supply-chain disruptions are keeping inflation high.

“The economy has a supply problem, not a demand problem,” Christopher Rupkey, chief economist at FWD Bonds in New York, told Reuters. “The economy has money to burn, and that is why inflation will be hard to extinguish.”

Inflation continues to rise. The Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred measure of inflation, climbed in September at an annual rate of 4.4 percent. Even after the volatile food and energy sectors are filtered out, the increase in the index was still 3.6 percent.

The Fed, after an early November meeting, decided to taper off its purchases of bonds in the coming months, but chose not to raise interest rates. “We don’t think it is time yet to raise interest rates,” Fed chairman Jerome Powell said after the meeting. “There is still ground to cover to reach maximum employment.”

The Conference Board reported that its Leading Economic Index rose 0.2 percent in September, to 117.5, after a 0.8 percent increase in August and a 0.9 percent increase in July. The index attempts to predict future economic activity.

“The U.S. LEI rose again in September, though at a slower rate, suggesting the economy remains on a more moderate growth trajectory compared to the first half of the year,” Ataman Ozyildirim, senior director of economic research at The Conference Board, stated in a press release. “The delta variant, rising inflation fears and supply-chain disruptions are all creating headwinds for the U.S. economy. Despite the LEI’s slower growth in recent months, the strengths among the components remain widespread. Indeed, The Conference Board continues to forecast strong growth ahead: 5.7 percent year over year for 2021 and 3.8 percent for 2022.”

The mood among the nation’s small businesses weakened slightly in September. The National Federation of Independent Business reported that its Small Business Optimism Index fell one point, to 99.1.

“Small business owners are doing their best to meet the needs of customers but are unable to hire workers or receive the needed supplies and inventories,” NFIB chief economist Bill Dunkelberg stated in a press release. “The outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations.”

Fifty-one percent of member business owners told the NFIB that they had job openings they could not fill. That is a 48-year high for the third consecutive month. A net 42 percent of owners reported raising pay in September, up 1 percent from August and also a 48-year high.

Confidence among the nation’s home builders rose in October. The National Association of Home Builders reported that its NAHB/Wells Fargo Housing Market Index rose four points, to 80, amid strong consumer demand.

“Although demand and home sales remain strong, builders continue to grapple with ongoing supply-chain disruptions and labor shortages that are delaying completion times and putting upward pressure on building material and home prices,” NAHB chairman Chuck Fowke stated in a press release.

NAHB chief economist Robert Dietz added: “Builders are getting increasingly concerned about affordability hurdles ahead for most buyers. Building material price increases and bottlenecks persist, and interest rates are expected to rise in coming months as the Fed begins to taper its purchase of U.S. Treasuries and mortgage-backed debt. Policy-makers must focus on fixing the broken supply chain. This will spur more construction and help ease upward pressure on home prices.”

All three major HMI indexes showed gains in October. The index that gauges current sales conditions rose five points, to 87; the component that measures sales expectations in the next six months posted a three-point gain, to 84; and the gauge that charts the traffic of prospective buyers moved four points higher, to 65.

Any number over 50 indicates that more builders view conditions as good rather than poor.

The Commerce Department reported that sales of new homes were up sharply in September. They rose 14 percent, to a seasonally adjusted annual rate of 800,000. It was the highest level since March.

Home resales were also higher. The National Association of Retailers reported that existing-home sales rose 7.0 percent in September, to a seasonally adjusted annual rate of 6.29 million.

“Some improvement in supply during prior months helped nudge up sales in September,” Lawrence Yun, the NAR’s chief economist, stated in a press release. “Housing demand remains strong as buyers likely want to secure a home before mortgage rates increase even further next year.”

The median existing-home price was $352,800, up 13.3 percent from September a year earlier. Prices rose in every region of the country. This marks 115 straight months of year-over-year increases.



PR Firm Celebrates 60th Anniversary

Martin Flory Group has served the RV and marine industry segments since 1962.

Screen Shot 2022-09-26 at 9.29.49 AM

Mack Boring Turns 100

The New Jersey-based engine and components supplier, started in 1922 by Edward “Mack” McGovern, today is still a family-run business.


IBEX Canceled

Tropical Storm Ian is expected to strengthen into a hurricane and impact Florida’s west coast sometime Wednesday.


Clearing the Deck

Bombardier Recreational Products unveiled the Rotax outboard with Stealth Technology in August


Shoring Up Your Defenses

Marine businesses are just as open to cyberattacks as all kinds of other businesses in nearly every industry


Hinckley Unveils SilentJet

Hinckley Yachts teamed up with Wisconsin-based transmission-maker Twin Disc to create a hybrid electric system called SilentJet that can switch automatically from diesel to electric power, depending on how much throttle you use.


Finding the Next Buyers

Discover Boating commissioned a research study to fine-tune targeting efforts in marketing.