Consumer confidence increased to an 18-year high in October, following an increase in September. The Conference Board Consumer Confidence Index now stands at 137.9 (1985=100), up from 135.3 a month ago. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved from 169.4 to 172.8. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 112.5 last month to 114.6 this month.
“Consumer Confidence increased in October, following a modest gain in September, and remains at levels last seen in the fall of 2000 (September 2000, 142.5),” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth. The Expectations Index posted another gain in October, suggesting that consumers do not foresee the economy losing steam anytime soon. Rather, they expect the strong pace of growth to carry over into early 2019.”
President Trump’s pro-business policies led to record low unemployment and his tax reforms have increased take-home pay for working families. The record high consumer confidence number shows that, despite what the media says, most people are feeling good about the economy and reaping the benefits of Trump’s agenda.
Consumers’ assessment of current conditions improved in October. The percentage of consumers saying business conditions are “good” increased from 39.9 percent to 40.5 percent, while those claiming business conditions are “bad” decreased from 9.6 percent to 9.2 percent. Consumers’ assessment of the labor market was also more favorable. Those claiming jobs are “plentiful” increased from 44.1 percent to 45.9 percent, while those claiming jobs are “hard to get” decreased from 14.1 percent to 13.2 percent.
Consumers’ optimism about the short-term future increased further in October. The percentage of consumers expecting business conditions will improve over the next six months increased from 25.8 percent to 26.3 percent, while those expecting business conditions will worsen declined, from 8.3 percent to 7.4 percent.
The more positive outlook comes at a critical time for retailers as the lucrative holiday shopping season is just beginning. If economic optimism translates into spending, the U.S. could see amazing GDP growth for the fourth quarter.