ANN ARBOR – Consumer confidence posted a healthy September gain due to more favorable prospects for the domestic economy as well as more favorable personal income expectations. The September reading, the second highest in the last seven years, points toward renewed strength in consumer spending. While the September rebound brought confidence back to its highest levels since the Great Recession, confidence has repeatedly failed to move above this level (see the chart below). The improved income expectations recorded in September have the potential to reinvigorate personal financial optimism that is the key driving force of behind large discretionary expenditures, especially those involving debt. Needless to say, it will take repeated and cumulative gains to reverse the impact of stagnant incomes on spending.

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