Consumer confidence improves in October

The Conference Board’s Consumer Confidence Index, which declined last month, advanced in October. The Index now stands at 81.1 (1985=100), up from 77 in September. The Expectations Index rose to 90.7 from 88.5. The Present Situation Index increased to 66.8 from 59.7.

“After declining for five consecutive months, the Present Situation Index reversed course in October,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. “A more favorable job market was a major factor in the turnaround. And, the belief that this trend will continue has boosted expectations. With the holiday season around the corner, this improvement in consumers’ spirits is a good omen for upcoming retail sales.”

Consumers’ appraisal of present-day conditions ended a five-month slide in October. Those reporting jobs are “hard to get” eased to 33.8% from 35.1%. Those claiming jobs are “plentiful” rose to 11.8% from 9.9%. Consumers’ assessment of current business conditions also improved, with families rating conditions as “good” increasing to 17.2%, up from 16.2%. Those claiming conditions were “bad” fell to 28.4% from 29.5%.

Consumers’ short-term outlook also picked up in October. Those expecting business conditions to improve over the next six months rose to 23.2% from 21.3%. Consumers expecting business conditions to become worse edged down to 11.3% from 11.9%.

The employment outlook was also more upbeat. Those anticipating more jobs to become available in the next six months increased to 19.7% from 16.6%. Those expecting fewer jobs to become available decreased to 20.8% from 21.1%. The proportion of consumers anticipating an increase in their incomes, however, fell to 16.7% from 19%.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup. The cutoff date for October’s preliminary results was the 21st.