Consumer confidence jumps to 5-month high in September

The numbers: Americans feel a lot better because of falling gasoline prices. A survey of consumer confidence in the U.S. jumped to a five-month high of 108 in September.

The labor market and rising wages gave Americans more confidence, the nonprofit Conference Board said Tuesday. The unemployment rate is close to a 54 year low and wages are rising at the fastest pace in decades.

Economists polled by The Wall Street Journal had predicted the index to rise to 104.5 from a revised 103.6 in the previous month.

The concern of high inflation has been eased by falling gas prices. There are increasing interest rates that are increasing their borrowing costs for houses, new cars and other big-ticket items.

The Federal ReserveFederal Reserve is trying to tame the highest inflation in 40 years, and is raising rates sharply. There is an increasing number of economists think a recession is imminent by next year and higher rates will slow the economy.

The Fed is worried that the laboriest in decades is worsening already high inflation. The central bank wants to slow the economy enough to reduce demand for labor and even cause the unemployment rate to rise.

A similar confidence gauge that looks ahead six months climbed to 80.3 from 75.8. That is the highest level in seven months.

In the final months of 2022, consumer spending may be boded by the improvement in confidence but inflation and interest rate hikes are strong drivers for growth in the short term, said Lynn Franco, senior director of economic indicators at the board.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX went up in Tuesday trades, against the tide of a series of sharp declines.