The Index of Consumer Sentiment was 101.1, up 6.3% from 95.1 in September and up 15.9% from 87.2 in October 2016. The measure of Current Economic Conditions was 116.4 in the preliminary results, an increase of 4.2% from 111.7 a month ago and rising 12.8% from 103.2 in the year-ago period. The Index of Consumer Expectations was 91.3, up 8.2% from 84.4 in September and climbing 18.9% from the 76.8 level during the same month last year.
The latest increase, which was broadly shared across age, income, and partisan subgroups, indicates a robust outlook for consumer spending that extends the current expansion to at least mid-2018. This would mark the second-longest expansion since the mid-1800s.
“While the early October surge indicates greater optimism about the future course of the economy, it also reflects an unmistakable sense among consumers that economic prospects are now about as good as could be expected,” said Richard Curtin, chief economist of the surveys. “This ‘as good as it gets’ outlook is supported by a moderation in the expected pace of growth in both personal finances and the overall economy, accompanied by a growing sense that, even with this moderation, it would still mean the continuation of good economic times.”
Despite the early October surge, Curtin said consumers now expect low unemployment, low inflation, small increases in interest rates, and modest income gains in 2018. The survey indicates that consumers have accepted limited prospects for improvements in living standards as they expect lackluster growth in personal income and the overall economy.
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An index of consumer sentiment rose in early October to its highest level since the beginning of 2004, indicating greater optimism about the future course of the economy, according to preliminary results for October of the Surveys of Consumers by the University of Michigan.