NEW YORK — Consumer confidence in the U.S. rose in October to its June level as Americans felt better about both current conditions and the months ahead, The Conference Board reported Tuesday.
The board’s Consumer Confidence Index climbed 7.5 points to 91.7, from 84.2 in September, which was revised slightly higher. The index is benchmarked to 100 in 1985. The preliminary figures come from an online survey conducted Oct. 1-21 by market research firm Toluna.
Better views of business conditions, both now and in the months ahead, accounted for most of the gain, said Fergus McCormick, the board’s senior economist for global indicators. He noted that the rebound coincided with easing retail gasoline prices from September to October.
“Yet, despite the increase in October, consumer confidence remained on the long-term downward trend that’s persisted over the past few years,” McCormick said.
Current conditions
The Present Situation Index, which reflects how consumers judge business and job conditions today, rose 8.6 points to 120.4.
The share of consumers rating business conditions “good” rose to 21.4% from 18.8%, while the share rating them “bad” fell to 17.8% from 20%. On jobs, 26.7% said work was “plentiful,” up from 24.3%, while 21.4% said jobs were “hard to get,” unchanged from September.
Outlook
The Expectations Index, built on consumers’ short-term outlook for income, business and jobs, gained 6.9 points to 72.6. The increase only partly made up for declines in each of the prior three months.
All three parts of the measure improved. Fewer consumers expected business conditions to worsen, 20.7% compared with 25.2% in September, and fewer foresaw a shrinking job market, 26.3% versus 27.6%. Consumers still expected their household incomes to grow, and the share anticipating an income decline fell to 12% from 14.9%.
Prices and spending
Consumers planned to spend less on services and durable goods over the next six months. McCormick said that likely reflected higher prices and persistent inflation that have cut into consumers’ buying power.
In written comments, more respondents cited prices, the cost of food and groceries, and oil and diesel. Mentions of war and conflict fell for a second straight month but stayed high, according to McCormick, while job worries edged up to a smaller degree.
Average inflation expectations for the next 12 months eased to 5.8% but remained elevated. Consumers still expected interest rates to rise over the coming year, and more expected stock prices to climb than fall.
On a six-month moving average basis, plans to buy cars and homes slipped slightly. Planned spending on durable goods fell in every category in October, including electronics such as smartphones, computers, laptops and tablets.
Expected spending on services was generally lower, with movies, theater, live entertainment and sporting events the exception. Restaurants, bars and takeout led planned service spending, followed by streaming, internet and mobile services; utilities; health care; and beauty and personal care, which slid from third to fifth.
Travel plans cooled as well. Anticipated spending on hotels and airfare for personal trips moderated, and 43.3% of consumers expected to take a vacation in the next six months, down from an upwardly revised 44.2% in September. More planned trips within the U.S., and fewer planned to go abroad.
Who feels better
On a six-month moving average basis, only consumers under 35 and households earning $100,000 or more showed rising confidence. Gen X, baby boomers and the Silent Generation remained well behind Gen Z and millennials, widening a generational divide that has emerged over the past two years.
Confidence rose across all political affiliations in October, with a much larger gain among Republicans.
Consumers also felt better about their family’s current finances after two weak months and stayed optimistic about the next six months. Asked how likely a U.S. recession is within the next year, “somewhat likely” remained the most common answer. Those measures are not part of the index.
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