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Consumer sentiment ticked up in September to its highest point in more than a year, according to an early reading.
The Thomson Reuters/University of Michigan's Index of Consumer Sentiment edged up more than two points in a preliminary September reading, putting it at a 14-month high of 84.6.
The increase in the headline index was driven by a more than four-point improvement in the gauge of consumer expectations, which rose to 75.6.
On the other hand, the Current Conditions Index fell more a point to 98.5. According to Paul Diggle, U.S. economist for Capital Economics, the small decline "could reflect the weaker pace of payroll growth in August or even the slowdown in some measures of housing market activity."
The UMich survey was released the same day as Deloitte's latest Consumer Spending Index, a measure of consumer cash flow used to predict future spending. According to the company, that index jumped up last month to 3.96.
"A notable decrease in initial unemployment insurance claims helped push the Index up," said Daniel Bachman, senior U.S. economist at Deloitte. "An improving labor market can be a boon to consumer confidence. If these trends continue, there is a strong likelihood that we could see an acceleration of economic growth in the latter part of the year."
Diggle agreed, observing that at its current level, consumer confidence is consistent with annualized spending growth of as much as 3 percent for the third quarter.
"That relationship is far from perfect and we don't think consumption will be quite that strong, but between 1.5 percent and 2.0 percent now looks eminently possible," he said.
