Consumer confidence surges in October to highest level since January
U.S. consumers showed renewed faith in the economy in October as fears about a recession faded and optimism about the future increased.
The Conference Board’s Consumer Confidence Index rose to 108.7 in October, up from 99.2 in September. It was the biggest monthly increase since March 2021 and the highest level of confidence since January.
The Present Situation Index — consumers’ assessment of current labor and business market conditions, saw a 14.2-point increase to 138.0. The Expectations Index — consumers’ short-term outlook for income, business — and labor market conditions—increased by 6.3 points to 89.1, well above the threshold of 80 that usually signals a recession ahead.
“In October’s reading, all five components of the Index improved,” said Dana M. Peterson, chief economist at the Conference Board. “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.”
Peterson noted that the percentage of consumers anticipating a recession during the next 12 months dropped to a new low, reaching 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 also became more upbeat about the stock market: 51.4% of consumers expected stock prices to increase over the year ahead, the highest reading since the question was first asked in 1987.
Consumers' purchasing plans
On a six-month moving average basis, purchasing plans for homes and new cars continued to increase. When asked about plans to buy more durable goods or services over the next six months, consumers continued to express a slightly greater preference for purchasing goods. Buying plans for big-ticket appliances were mixed and buying plans for electronics were slightly down
Plans to dine out and stay in hotels popped in October. Plans to enjoy entertainment outside of the home, such as museums and amusement parks, while still at the bottom of the list, also ticked up.
Additional findings from the October report are below.
Present situation
Consumers’ assessments of current business conditions turned positive in October.
- 21.4% of consumers said business conditions were “good,” up from 18.6% in September.
- 16.4% said business conditions were “bad,” down from 20.5%.
Consumers’ appraisals of the labor market improved in October.
- 35.1% of consumers said jobs were “plentiful,” up from 31.3% in September.
- 16.8% of consumers said jobs were “hard to get,” down from 18.6%.
Expectations six months hence
Consumers were more optimistic about the business conditions outlook in October.
- 21.0% of consumers expected business conditions to improve, up from 19.4% in September.
- 13.2% expected business conditions to worsen, down from 17.1%.
Consumers’ assessments of the labor market outlook became more optimistic than pessimistic for the first time since July 2023.
- 17.8% of consumers expected more jobs to be available, up from 17.1% in September.
- 17.1% anticipated fewer jobs, down from 18.8%.
Consumers’ assessments of their income prospects were virtually unchanged in October.
- 18.9% of consumers expected their incomes to increase, unchanged from September.
- 12.8% expected their incomes to decrease, slightly down from 12.9%.
Assessment of Family Finances and Recession Risk
- Consumers’ assessment of their family’s current financial situation were essentially unchanged.
The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise and panel of over 36 million consumers. The cutoff date for the preliminary results was Oct. 23.
