U.S. consumer confidence rose in October to an 18-year high amid optimism about jobs and the economy, according to figures Tuesday from the New York-based Conference Board.
The results, coming amid a rout in U.S. stocks, bode well for continued gains in consumer spending, which accelerated in the third quarter to the best pace since 2014. A solid job market is helping to support household confidence as well as Americans’ purchases, which account for about 70 percent of the economy. The figures add to signs of contentment with the economy ahead of next week’s U.S. midterm elections that will decide control of both chambers of Congress.
The shares saying current business conditions are good and jobs are plentiful increased from the prior month. The outlooks improved for the economy and incomes, while a slightly smaller share said more jobs would be available in the next six months.
The labor differential, which measures the gap between respondents saying jobs are plentiful and those who say they’re hard to get, jumped to 32.7 percentage points, the widest since January 2001.
Even though sentiment remains relatively strong, clouds over the outlook include U.S. tariffs on imports from China, which the Trump administration plans to escalate in January. That may drive up prices of items that Americans use in their daily lives, at a time wages are still rising only modestly.
“Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. The expectations gauge indicates “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.”
— 26.3 percent of consumers said they expect better business conditions in next six months, up from 25.8 percent in prior month
— Share of households who expect incomes to rise in next six months increased to 24.7 percent, from 22.5 percent
— Share who said more jobs will be available in coming months slipped to 21.9 percent from 22.1 percent, while those seeing fewer jobs decreased
— Buying plans showed the biggest share of consumers in a year plan to buy a car within six months while home-buying plans were the highest in six months; slightly smaller share expects to purchase major appliances
— Cutoff date for survey was Oct. 18, a week after U.S. stocks began to plummet
Bloomberg writer Kristy Scheuble contributed to this report.
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