Consumers are brushing aside election uncertainty and inflation concerns and showing a lot more confidence, according to The Conference Board. Its Consumer Confidence Index jumped in October, rising from 99.2 in September to 108.7.
The Expectations Index—based on 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 an approaching recession.
"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 Peterson, chief economist at The Conference Board. "In October's reading, all five components of the Index improved.”
In October, consumers turned positive about current business conditions. Their views on the job market moved higher after months of weakness. 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, Peterson said. “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."
No sign of a recession
Peterson also said the percentage of consumers who expect 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.
The confidence also extends to Wall Street. Consumer optimism about the stock market rose, with more than half now expecting the market to extend its current rally. Fewer than 24% of consumers expect stock prices to decline in the near term.
The share of consumers expecting higher interest rates over the next 12 months increased to 47.5% after declining for four months in a row.