US consumer confidence in September expected to remain near 7-year high hit in August

Economic Indicators Associated Press

The Conference Board releases its September index on U.S. consumer confidence. The report will be issued at 10 a.m. EDT Tuesday.

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STRONG CONFIDENCE: The expectation is that the index for last month will come in at 92.3, very close to the 92.4 of August.

RISING SENTIMENT: In August, confidence reached its highest point in nearly seven years, a reading of 92.4, up from 90.3 in July. The August confidence report was boosted by a string of strong monthly job gains.

The rising optimism suggests that Americans will be more likely to spend in the months ahead, giving the economy a welcome boost. Consumer spending drives about 70 percent of economic activity.

The government reported Monday that consumer spending in August rose a solid 0.5 percent, bolstered by a surge in spending on new cars. Economists believe spending will remain strong in coming months as consumers' confidence increases, reflecting steady job gains which are helping to boost incomes.

Economists believe the economy created 215,000 jobs in September, a rebound after job growth slowed to 142,000 in August. The unemployment rate is expected to remain steady at 6.1 percent in the monthly jobs report from the government Friday.

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A separate measure of consumer confidence put out by the University of Michigan found that consumer sentiment rose in August to the highest level since July 2013, bolstered by greater optimism that the economy will grow and incomes will rise.

Consumer sentiment is also feeling some tail wind from recent declines in gasoline prices. The nationwide average price for a gallon of gas at the beginning of this week was $3.34, down 10 cents from a month ago.

Falling gas prices act like a tax cut, giving Americans more money to spend elsewhere.