U.S. consumer confidence rose in October to its highest level since 2007, driven primarily by improved sentiments with the job market, according to The Conference Board Consumer Confidence Index, which had decreased in September, but rebounded this month. The index now stands at 94.5, up from 89 in September. The Present Situation Index, meanwhile, edged up from 93 to 93.7, while the Expectations Index increased sharply to 95 from 86.4 in September.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen with a cutoff date of Oct. 16 for preliminary results.
"A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation," noted Lynn Franco, director of economic indicators at The Conference Board. Looking ahead, Franco said consumers "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.”
Other highlights of the October 2014 Consumer Confidence Survey finds:
- 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 percent to 24.5 percent. Those claiming business conditions are “bad” also increased slightly, from 21.2 percent to 21.7 percent.
- Consumers’ assessment of the job market improved moderately, with the proportion stating jobs are “plentiful” increasing marginally from 16.3 percent to 16.5 percent, and those claiming jobs are “hard to get” declining slightly from 29.4 percent to 29.1 percent.
- 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 percent to 19.6 percent, while those expecting business conditions to worsen fell from 11.4 percent to 9.3 percent. Consumers’ outlook for the labor market also improved markedly.
- Those anticipating more jobs in the months ahead increased to 16.8 percent from 16 percent, while those anticipating fewer jobs fell from 16.9 percent to 13.9 percent. The proportion of consumers expecting growth in their incomes rose from 16.9 percent in September to 17.7 percent in October, while the proportion expecting a drop in income fell from 13.4 percent to 11.6 percent.