Jobs Growth, Consumer Confidence Post September Gains

Restaurant sales and traffic have been showing signs of weakness, but two of the key drivers of foodservice sales reported positive gains in September. The U.S. economy added another 156,000 jobs during the month and both major services tracking consumer attitudes said confidence rose.

Even with a slight downward revision in jobs growth in July and August, the economy averaged 192,000 new jobs a month during the third quarter. Economists were happy to see more people looking for work in September, as well as another gain in hourly wages. For the past 12 months, wages have risen 2.6%. Employment at foodservice and drinking places rose by another 30,000 in September. The sector has added 300,000 so far this year.

The University of Michigan’s Consumer Sentiment Index rose to 91.2 in September’s final reading, up from 89.8 in August and above the 87.2 reading a year ago. The Expectations Index also rose. “The continuing strength in consumer demand is due to low unemployment and rising wages as well as low inflation and low interest rates,” said UM’s Surveys of Consumers Chief Economist Richard Curtin. But he warned that consumer spending, especially for large ticket items, is closely tied to low interest rates and that wage and job gains must continue to be strong if they are to offset anticipated increases in interest rates.

The Conference Board’s Consumer Confidence Index also gained in September, rising to 104.1 from 101.8 in August. The research group’s Expectations and Present Situation indices rose as well. “Overall, consumers continue to rate current conditions favorably and see moderate economic expansion in the months ahead,” said Lynn Franco, director of economic indicators at The Conference Board.