US consumer confidence rebounds as spending plans soften
US consumer confidence rose in October after four consecutive monthly declines. Households gave better assessments of business and employment conditions, while their six-month expectations also improved. The rebound coincided with easing gasoline prices, according to The Conference Board. Plans for durable goods, vacations and several services nevertheless weakened, with living expenses remaining a concern for consumers.
Economics & Markets··Midday
Confidence rises after four monthly declines
US consumer confidence recovered in October, with The Conference Board’s index gaining 7.5 points to 91.7. The nonprofit economic research organisation’s survey ended the sequence of declines from June through September. September’s reading was revised from 81.9 to 84.2. The index uses 1985 as its reference year, with that year set at 100.[1], [2]
The present-situation component rose 8.6 points to 120.4, reflecting more favourable assessments of current business and employment conditions. The expectations component, covering income, jobs and business conditions over the coming six months, increased 6.9 points to 72.6. It recovered part of the ground lost over three monthly declines. The Conference Board historically associates expectations below 80 with recession risk.[1], [2]
Households give better assessments of jobs and income
The share saying jobs were plentiful increased from 24.3 per cent to 26.7 per cent. The proportion describing jobs as hard to get held at 21.4 per cent, widening the gap between these two responses. Fergus McCormick, the organisation’s senior economist for global indicators, said the confidence recovery coincided with easing gasoline prices. Consumers continued to raise concerns about food, energy and other living expenses.[1]
Expectations about future business conditions improved, although negative responses still outnumbered positive ones. Negative responses also outnumbered positive ones for future labour-market conditions. Income expectations were more favourable: the share anticipating higher income increased from 18.1 per cent to 18.7 per cent, while the share expecting a decline fell from 14.9 per cent to 12.0 per cent.[1]
Major purchase and vacation plans soften
Average inflation expectations for the next twelve months eased to 5.8 per cent. Plans to buy durable goods and electronics weakened, while intended services spending generally declined outside entertainment. The proportion planning a vacation fell from 44.2 per cent to 43.3 per cent. Auto and home purchase plans also eased on a six-month moving average. The October results were preliminary, covering online responses collected from 1 to 21 October through research company Toluna. Consumers expected higher interest rates over the coming twelve months, while more anticipated rising stock prices than falling prices.[1]
