Buyers’ gauge 137.9 in October
Confidence hits new 18-year high
WASHINGTON — U.S. consumer confidence rose again this month, hitting a new 18-year high.
The Conference Board said Tuesday that its consumer confidence index climbed to 137.9 in October from 135.3 in September. Both readings are the highest since September 2000.
The index measures consumers’ assessment of current economic conditions and their outlook for the next six months. Both improved in October. The cutoff date for the survey was Oct. 18, a week after U.S. stocks began to plummet.
“Consumers do not foresee the economy losing steam anytime soon,” said Conference Board economist Lynn Franco. “Rather, they expect the strong pace of growth to carry over into early 2019.”
The share of respondents saying that jobs are “plentiful” rose this month to 45.9 percent, the highest since January 2001.
Consumers’ spirits have been lifted by a strong labor market. Unemployment has dropped to 3.7 percent, lowest since 1969. The government reported Friday that consumer spending from July through September was the strongest in nearly
four years.
The shares saying current business conditions are good and jobs are plentiful increased from September. 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.
Share of households who expect incomes to rise in the next six months increased to 24.7 percent, from 22.5 percent, while 26.3 percent of consumers said they expect better business conditions in the next six months, up from 25.8 percent in September. The 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.
In a research note, Jennifer Lee, senior economist at BMO Capital Markets, called the October uptick in confidence “pretty impressive, given the wild swings in the stock market this month … At the end of the day, it is the job market, or the security of having a job with a regular paycheck, that supports confidence and spending. So far, so good.”
Economists monitor confidence because consumer spending accounts for about 70 percent of U.S. economic output.
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. Information for this article was contributed by Paul Wiseman of The Associated Press, and by Shobhana Chandra and Kristy Scheuble of Bloomberg News.