Consumer confidence hits 18-year high
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 houses of Congress.
The share of respondents 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. The expectations gauge indicates “that consumers do not foresee the economy losing steam anytime soon.”