Dana Peterson, Chief Economist at the Conference Board, joins Yahoo Finance’s The First Trade with Alexis Chrisotoforous and Brian Sozzi to discuss The Conference Board’s Consumer Confidence Index for the month of September and future outlook for the rest of the year.
BRIAN SOZZI: OK, American consumers are getting more confident in the economic recovery. The Conference Board's closely watched measure of consumer confidence shot up this month by the most in 17 years, even though it's still way below pre-pandemic levels. Dana Petersen is the chief economist at The Conference Board and joins us now. Dana, always good to speak with you here. So help square this with us. The economy is still under so much pressure. We've seen pressure on retail sales, but here's consumer confidence ahead of the first presidential debate tonight doing pretty well. How do you explain that?
DANA PETERSON: Well, we did see very broad-based gains in consumer confidence in the last month in September. That's following two months of decline. And it was, we saw improvements across income, across age groups, and as well across states and regions. And it reflected better views in terms of the present situation, as well as expectations for stronger business activity, and also for jobs.
ALEXIS CHRISTOFOROUS: I was a little bit surprised, Dana, to see that confidence was so high, given the fact that those extra unemployment benefits, the $600 a week, has gone away. What did you ask folks about specifically there? And were you surprised to see that?
DANA PETERSON: Well, I mean indeed, it certainly was a little bit surprising that we saw the huge jump. Indeed, yes, the measure is still well below February levels. But I think that more businesses are starting to open. More people going back to work. We're seeing more activity in mobility measures. So all those things I think are being reflected in consumer confidence. Certainly, there's still a lot of concerns out there, and we're seeing that in terms of behaviors where we're still not at 100% or above 100%. But nonetheless, we do see things improving slowly but surely. And I think that's reflected in this morning's data.
BRIAN SOZZI: Yeah, Dana, when I saw this data, my first thought was was, wow, the election is not weighing on the minds of consumers maybe as much as you would think. Is that one of the takeaways here?
DANA PETERSON: Well, typically people don't really start thinking about the election until about six weeks beforehand. So potentially, our survey came out well, our survey was that a little bit before that. But I think that people are definitely going to be concerned about things pertaining to the coronavirus. Whether or not there's going to be a second wave. Whether or not there are going to be additional disruptions in activity on account of the virus.
And whether or not there are going to be effective treatments, as well as a vaccine anytime soon. So all of these factors, certainly non-economic factors, will be a function of how people think ahead of the elections. But again, we are quite pleased to see that there was an improvement in confidence, at least in September.
ALEXIS CHRISTOFOROUS: Dana, was the survey, in terms of timing, was the survey taken before we started to see this uptick in new coronavirus cases and deaths not only in the US, but in other countries as well?
DANA PETERSON: Well, that's potentially true. And also, we need to understand that a lot of this is regional. And we did notice that confidence improved, but was the least excitable, if you will, in places like Chicago and New York. Certainly in New York, we have seen an uptick in cases. But throughout the country, it's quite variable.
But I think what's very important, is that potentially these data are boding well for the holiday season. Indeed, if we continue to see very strong sentiment in October, then we might see healthy spending in the holiday season. Much of it is probably going to be online, just given the number of surveys and data out there indicating so.
BRIAN SOZZI: Ultimately on the holidays, to your point, we all look at consumer confidence as a read-through to consumer spending. What type of holiday season in terms of spending do you think we could have just based on this report?
DANA PETERSON: Well, if we just base it upon September, then we'd say, happy holidays. Lots and lots of spending. But again, September is a little early. In our October survey, we do tend to probe or ask our respondents about what they're thinking in terms of spending. But other agencies that follow retail very closely have said that potentially, this could be a decent holiday season, especially if more people are going back to work.
And also because, and this could also be the biggest season where we've seen, where we might see online spending. Again, that trend was already in tow, but the pandemic accelerated that trend. And we could see very strong sales there.
ALEXIS CHRISTOFOROUS: I know that people seem more optimistic about current conditions and the current labor force, but what did your survey tell you about how people are thinking about the short-term and long-term outlook for the economy?
DANA PETERSON: Sure. We did see an uptick in expectations. That measure's been moving back and forth over the last six months. But nonetheless, we did see a pickup in this latest month after. And when we think about optimism, and also jobs being hard to get, more people were optimistic this month than pessimistic. And certainly in the last two months, we saw pessimism about the outlook. And even when we look at expectations for businesses and jobs, those measures also moved up. And also, I would mention that buying plans have also been improving gradually.
BRIAN SOZZI: And Dana, I joked a little bit before you came on. The last time we saw you, it was back in our big beautiful studio many months ago, and you were still at Citi. So you just recently arrived to the Conference Board. As you have gotten settled in, how will you put your stamp on your new position as you look to next year?
DANA PETERSON: Well, I mean certainly to continue our award-winning forecasting and making sure that we continue to be a presence out there and give balanced and data-backed opinions about what's going in the economy, and also to give insights for what's coming ahead.
BRIAN SOZZI: Are there any new surveys you're looking to launch or anything in particular?
DANA PETERSON: Well, that's proprietary. But certainly we have our leading indicators measures, we have our confidence measures. The confidence measures not only for the US, but also globally, leading indicators for the US and a number of other economies. And all these things that are out there. And we're going to continue to provide the information that consumers and businesses need to know based on these indicators.
BRIAN SOZZI: Well, good luck on the new position. Dana Petersen, Chief Economist at The Conference Board, look forward to staying in touch.
DANA PETERSON: Thank you.