Consumers Are Enthusiastically Spending

J: By far the longest-running survey of the way that consumers feel about their economic position and the future are those that have been conducted since 1946 by the Survey Research Center at the University of Michigan. On October 13, they stunned all of us who follow their data with the news that the preliminary index for October was 101.1 (March 1966=100). Not only was this an enormous leap from the 95.1 level of September, it was also the highest level since January 2004.

The chart shows just how extraordinary such a high reading on this index is. The Chief Economist for these surveys, Dr. Richard Curtin, described these results as being "as good as it gets." Such an elevated level of the index is consistent with high and rising retail sales.

As if on cue, the Census Bureau announced on October 13 that total retail and food services sales shot up by 1.6 percent in September as compared to August. That was the largest one-month increase since March 2015.

The next chart shows that total retail and food services sales for September were a record $483 billion. This was an increase of 4.4 percent from September 2016. For the first nine months of 2017, total retail and food services sales were a record $4.2 trillion. That was a rise of 3.8 percent from the same period of 2016.

None of these records should be particularly surprising. More people are employed than ever before in the history of the US. Collectively, their incomes are higher than ever before, and adjusted for inflation, median household incomes have finally surpassed the old record set in 2000.

Furthermore, both incomes and employment levels are expected to keep growing. So is the net worth of consumers. That looks like more consumer spending is on the way.