The recent reports from the Conference Board's Consumer Confidence Survey have been a persistently middling to depressing economic indicator, but September's 9-point gain over August made for a bit of unexpected good news. The Conference Board's index came in at 70.3, up from 61.3 in August, beating the expectations of economists who, according to Bloomberg, thought the index would stay level. CNN's survey had predicted a modest rise to 63, as did Reuters.
Since consumer confidence measures how people are feeling about the economy, not actual economic performance, the sudden rise in optimism is good news for President Barack Obama's re-election efforts and may explain why he is leading Mitt Romney in the polls despite bad economic numbers, like persistent high unemployment, that usually are bad news for incumbent presidents. It's the argument that Bill Clinton made at the Democratic Convention: "if you'll renew the President's contract you will feel it."
But how to explain the sudden jump in confidence? CNN focused on people's confidence in the employment situation: "Consumers were more positive about the employment picture this month. The number of people saying that jobs are 'plentiful' rose to 8.3 percent from 7.2 percent, while those saying jobs are 'hard to get' edged lower." Reuters, meanwhile, pegged the rise to increasing home values. "The S&P/Case Shiller composite index of 20 metropolitan areas rose for the sixth month in a row, up 0.4 percent in July on a seasonally adjusted basis," although that gain fell short of a predicted 0.9 percent rise. Still, the pleasing numbers from the Consumer Confidence Survey show people are at least feeling a lot better about the economy, regardless of modest job growth.