Consumer Confidence Jumps to 91.7 as Gas Prices Ease, Beating Forecasts

Americans’ confidence in the economy rebounded in October, with the Conference Board’s index jumping 7.5 points to 91.7 as gasoline prices eased.

The Present Situation Index, which measures views of current business and job conditions, rose 8.6 points to 120.4. The Expectations Index climbed 6.9 points to 72.6, only partially reversing three straight monthly declines.

September’s reading was revised up slightly to 84.2. Responses for the preliminary October results were collected from Oct. 1 to Oct. 21.

Economists polled by Reuters had forecast a reading of 81, following the 81.9 initially reported for September.

“The recovery was in line with retail gasoline prices easing from September to October,” said Fergus McCormick, a senior economist at the Conference Board.

“Yet, despite the increase in October, consumer confidence remained on the long-term downward trend that’s persisted over the past few years,” he said.

The national average for regular gasoline was $4.27 a gallon Tuesday, down from $4.48 a month earlier but well above the $3.05 drivers paid a year ago, ABC News reported.

Prices remain the top complaint. McCormick said write-in responses showed consumers “continued to express frustration with rising costs,” with more references to food and groceries and to oil and diesel prices.

Average 12-month inflation expectations declined but stayed elevated at 5.8%. Consumers still expected higher interest rates over the next year, while more expected stock prices to rise than fall.

Spending plans softened. Consumers planned to spend less on services and durable goods over the next six months, which McCormick said likely reflected higher price levels and persistent inflation eroding purchasing power.

Republicans Lead the Rebound

Confidence improved across all political affiliations in October, but much more so among Republicans, the Conference Board said. Older generations continued to trail Gen Z and millennials by a wide margin.

Views of the job market improved modestly. The share of consumers saying jobs were “plentiful” rose to 26.7% from 24.3%, while 21.4% said jobs were “hard to get,” unchanged from September.

Fewer people are planning getaways. The share of consumers planning a vacation in the next six months slipped to 43.3% from 44.2%, with more planning domestic trips and fewer heading abroad.

Other data released Tuesday painted a mixed picture. New home sales slipped 0.6% in September to an annual rate of 676,000, and the median sale price of $400,400 was 3.9% below a year earlier, the Census Bureau said.

Orders for durable goods rose 1.8% to $345.4 billion in September, up in six of the last seven months, led by a 4.6% jump in transportation equipment. Excluding transportation, orders rose 0.5%.

The confidence report lands a week before the Nov. 3 midterm elections, in which affordability has been a central issue for voters.

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