U.S. consumer confidence climbed sharply in October, with The Conference Board’s Consumer Confidence Index rising 7.5 points to 91.7, its highest level since May.
- The improvement followed several months of weakening sentiment, although consumers remain cautious about the economic outlook.
- Economists had projected more deterioration, with confidence falling to 80.
Why it matters: The Present Situation Index, which measures consumers’ assessment of current business and labor market conditions, increased 8.6 points to 120.4.
- Meanwhile, the Expectations Index rose 6.9 points to 72.6, partially reversing three consecutive monthly declines.
A growing divide: On a six-month moving average basis, only consumers under 35 and households earning at least $100,000 reported improving confidence. Gen X, Baby Boomers and the Silent Generation remained significantly less optimistic than younger generations.
Political differences: Confidence improved across all political affiliations, but the increase was considerably stronger among Republicans.
The bottom line: October’s rebound is encouraging, but the Expectations Index remains below 80, a threshold historically associated with heightened recession risks.