The Conference Board said that its consumer confidence index jumped to 108.7 in October from 99.2 in September. It was the biggest monthly gain since March of 2021. Analysts forecast a more modest reading of 99.3.
The consumer confidence index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
The measure of Americans’ short-term expectations for income, business and the job market increased by 6.3 points to 89.1. The Conference Board says a reading under 80 can signal a potential recession in the near future. The proportion of consumers anticipating a recession in the next 12 months fell to its lowest level since the board first posed the question as part of its survey in July of 2022.
The board reported Tuesday that consumers’ view of current conditions climbed 14.2 points to a reading of 138.
“Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at The Conference Board. “In October’s reading, all five components of the Index improved. Consumers’ assessments of current business conditions turned positive. Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data. Compared to last month, consumers were substantially more optimistic about future business conditions and remained positive about future income. Also, for the first time since July 2023, they showed some cautious optimism about future job availability.
“October’s increase in confidence was broad-based across all age groups and most income groups. In terms of age, confidence rose sharpest for consumers aged 35 to 54. On a six-month moving average basis, householders aged under 35 and those earning over $100K remained the most confident.”
Peterson added: “The proportion of consumers anticipating a recession over the next 12 months dropped to its lowest level since the question was first asked in July 2022, as did the percentage of consumers believing the economy was already in recession. Consumers’ assessments of their Family’s Current Financial Situation were unchanged, but optimism for the next six months reached a series high.”
