U.S. consumers feel more confident as gasoline prices fall | DayDayNews

More people are planning to buy cars, major appliances, but fewer are ready to buy homes as interest rates rise.

U.S. consumers became more confident for the second straight month as gasoline prices continued to fall.

The Conference Board said on Tuesday its consumer confidence index rose to 108 in September from 103.6 in August. As U.S. households were hit by higher prices, especially at gasoline pumps, the monthly gains came after three straight months of declines.

The business research group’s present situation index — which measures consumers’ assessments of current business and labor market conditions — also rose again, rising to 149.6 in September from 145.3 in August.

The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — rose to 80.3 in September from 75.8 in August.

Analysts surveyed by data provider FactSet had expected consumer confidence to rise slightly as gasoline prices retreated from highs of more than $5 a gallon ($1.30 a liter) around mid-year. The average price of a gallon of gasoline in the U.S. fell to $3.75 ($0.99 a liter) on Tuesday, the AAA Automobile Club said.

While inflation appears to have slowed in some respects recently, Most things still cost a lot more than a year ago.

Earlier this month, the government reported that consumer prices rose 8.3 percent from a year earlier and 0.1 percent from July. But “core” price increases, excluding volatile food and energy costs, remain a concern.It exceeded expectations and raised concerns Fed will be more aggressive in raising interest rates and increase the risk of recession.

The government reported earlier this month that core prices rose 6.3% in the year to August and 0.6% in the July-August period, driven by high rents, healthcare and new cars.

Since March, the Fed has implemented the fastest pace of rate hikes in decades in an attempt to contain Four years of high inflationwhich punished households with soaring costs for food, gas, rent and other necessities.

Last week, the Fed raised its benchmark short-term rate, which affects many consumer and business loans, to a range of 3% to 3.25%, the highest level since early 2008. It was the third consecutive quarter the Fed has raised interest rate growth, and most economists and analysts expect more to come by the end of the year.

Lynn Franco, senior director of economic indicators at the Conference Board, said consumers’ willingness to buy big-ticket items was mixed. More people say they expect to buy a car or major appliance in the near future, but few say they plan to buy a home anytime soon as rising interest rates add hundreds of dollars to monthly mortgage payments Forehead.

Last week, mortgage buyer Freddie Mac said the average rate on a 30-year mortgage rose to 6.29%, the highest level since the October 2008 housing crash triggered the Great Recession.

“Looking ahead, improved confidence could bode well for consumer spending in the final months of 2022, but inflation and interest rate hikes remain strong headwinds to growth in the near term,” Franco said.

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