WASHINGTON, DC – As usual, with elections upon us and hopes for change, the U.S. consumer confidence rebounded in October, hitting a seven-year high. The Conference Board said Tuesday that its confidence index climbed to 94.5 (1985=100), the strongest reading since October 2007 and the start of the Great Recession a few months later. This month’s gains reversed a revised decline to 89 in September from 93.4 in August.
Job gains and falling gasoline prices have helped to improve sentiment, despite muted economic growth in Europe and China that has fueled volatility in financial markets. Consumer confidence has been trending higher from lows during the worst downturn since the 1930s. However, confidence still lags pre-recession highs more than five years into the recovery.
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was October 16.
Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer confidence, which had declined in September, rebounded in October. A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation. Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market, and are more optimistic about their future earnings potential. With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers.”
Consumers’ appraisal of current conditions was moderately more favorable in October than in September. Their view of business conditions was mixed; while the proportion saying conditions are “good” inched up from 24.2% to 24.5%, those claiming business conditions are “bad” also increased slightly, from 21.2% to 21.7%. Consumers’ assessment of the job market improved moderately, with the proportion stating jobs are “plentiful” increasing marginally from 16.3% to 16.5%, and those claiming jobs are “hard to get” declining slightly from 29.4% to 29.1%.
Consumers’ optimism, which had declined considerably in September, improved in October. The percentage of consumers expecting business conditions to improve over the next six months increased from 19.0% to 19.6%, while those expecting business conditions to worsen fell from 11.4% to 9.3%. Consumers’ outlook for the labor market also improved markedly. Those anticipating more jobs in the months ahead increased to 16.8% from 16.0%, while those anticipating fewer jobs fell from 16.9% to 13.9%. The proportion of consumers expecting growth in their incomes rose from 16.9% in September to 17.7% in October, while the proportion expecting a drop in income fell from 13.4% to 11.6.