Nearly five years after the December 2007 onset of the Great Recession, and four years after the September 2008 stock market crash that triggered the worst financial crisis since 1929, consumer confidence last month returned to its highest level since September 2007.

According to the University of Michigan Survey Research Center (UMSRC), which has conducted its monthly consumer sentiment survey since 1952, the September consumer sentiment index rose to 83.1, from 78.3 in August. That 5.4% increase is dwarfed by the 31.6% gain from September 2011, when the index stood at 59.5. The index hit its recession bottom of 55.3 in November 2008. Based on a telephone survey of 500 consumers, the index is normalized to have a value of 100 in December 1964.

Analysts credit rising home values, declining unemployment and stock market strength for the growth in consumer confidence, which has been reflected in other measures as well. UMSRC’s index of consumer expectations six months from now rose to its highest level since July 2007, and its monthly gauge of current conditions improved by 3.4%. Last week’s Bloomberg Consumer Comfort Index remained near a three-month high. 

-Matt Bewig

To Learn More:

Confidence Posts Significant Gain (by Richard Curtin, University of Michigan Survey Research Center) (pdf)

Consumer Sentiment in U.S. Rises to Pre-Recession High (by Elizabeth Dexheimer, Bloomberg)