Consumer Confidence Kept Rising in October, Now at 18-Year High
The Conference Board reported Tuesday morning that its consumer confidence index for the month of October rose from a revised reading of 134.5 in September to 137.9. The expectations index jumped from 112.5 to 114.6, and the present situation index rose from 169.4 to 172.8. The consensus estimate for October called for a slight dip to an overall index reading of 136.
The assessment of present-day conditions improved again in October. The percentage of consumers who said business conditions are “good” rose from 40.5% to 41.4%, while those claiming business conditions are “bad” declined from 9.3% to 9.1%.
Consumers’ assessment of the October labor market also improved. The proportion stating jobs are “plentiful” increased from 44.1% to 45.9%, and those claiming jobs are “hard to get” dropped from 14.1% to 13.2%.
Lynn Franco, director of economic indicators at the Conference Board, said:
Consumer Confidence increased in October, following a modest gain in September, and remains at levels last seen in the fall of 2000 (September 2000, 142.5). Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth. The Expectations Index posted another gain in October, suggesting that consumers do not foresee the economy losing steam anytime soon. Rather, they expect the strong pace of growth to carry over into early 2019.
On the jobs front, expectations for new jobs dipped from 22.1% to 21.9% in October and the number of respondents who expect fewer jobs also dropped from 11.4% to 10.5%. Regarding their own income, 224.7% expect an improvement in the short term, up from 22.5% in September. The proportion expecting a decrease in income rose from 7.6% to 8.5%.
Optimism about the short-term outlook rose sharply in October. The percentage of consumers expecting business conditions to improve over the next six months increased from 25.8% to 26.3%, while those expecting business conditions to worsen declined from 8.3% to 7.4%.
The Conference Board’s Consumer Confidence Survey is based on a probability-design random sample and is conducted for the Conference Board by Nielsen. The index baseline is 1985=100.