Consumer confidence was supposed to have fallen back this month as stock market losses took their effect. But instead confidence is inexplicably rising, to 103.0 in September which is 7 points over the consensus and 3 points over the top estimate. The gain is centered in the present situation component which hints at ongoing strength in the labor market and immediate strength in consumer spending. The present situation jumped more than 5 points to 121.1 which is, by far and away, the best reading of the recovery, since September 2007.

The consumer’s assessment of the current jobs market is very strong. Those describing jobs as hard to get is at 24.3 percent, which is low for this reading, while those describing jobs as plentiful is at 25.1 percent which is high for this reading. On current business conditions, 28.0 percent describe them as good, again a strong reading, with only 16.7 percent as bad for another sign of strength.

The expectations side of the report is solid but less spectacular with the component at 91.0 for a 6 tenths decline from August. The most striking reading in this group is expectations for future income where 19.1 percent see an increase for a nearly 3 percentage point gain from August which is very strong.

Buying plans show special strength for homes where indications are the highest since November and also strength for cars which are at their best since March. This latter reading is very impressive given how strong car sales have been this year and it points to strength for Thursday’s motor vehicle sales.

For prices, all this strength may be offsetting the drop underway at the gasoline pump. Inflation expectations rose a sharp 3 tenths to 5.2 percent which is the highest reading since March.