The Conference Board’s Consumer Confidence Index bounced back strongly in October, erasing a drop last month and hitting its highest level in seven years.
The index moved to 94.5 from its revised mark of 89 in September.
The increase this month brought the index to its best level since a pre-recessionary tally of 95.2 in October 2007, prior to the recession. The drop last month ended a four-month string of increases that had lifted the index to 93.4 in August.
Analysts’ expectations for the month were modest by comparison with the results. On average, they expected an index result of 87.
The Present Situation Index rose to 93.8 from 93 last month and the Expectations Index increased more dramatically, hitting 95 after dipping to 86.4 in September.
“A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation,” said Lynn Franco, director of economic indicators for The Conference Board. “Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market and are more optimistic about their future earnings potential. With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers.”
The percentage of respondents expecting business conditions to improve in the next six months increased to 19.6 percent from 19 percent and those expecting jobs to become more plentiful was up to 16.8 percent from 16 percent while those expecting weakness in the job market fell to 13.9 percent from 16.9 percent.
Consumers expecting personal income growth rose to 17.7 percent of the same from 16.9 percent in September while those expecting a drop in income fell to 11.6 percent from 13.4 percent.
Readings on the economy were strongest among those under 35, whose registered a 123.1 confidence mark, and lower for those between 35 and 54 years of age (96.5) and those 55 and over (80.9).