The Conference Board Consumer Confidence Index gained 7.5 points to 91.7 in October, up from a revised 84.2 in September but still below the 100 line that divides positive and negative sentiments.
In the organization’s monthly poll, the Present Situation Index, based on consumer assessment of current business and labor market conditions, advanced 8.6 points to 120.4. The Expectations Index, based on consumer short-term outlook for income, business and labor market conditions, increased 6.9 points to 72.6, partially reversing three consecutive monthly declines.
Still, on a six-month moving average basis, consumer plans to purchase autos and homes declined slightly in the Conference Board’s October reading. Planned spending on durable goods in the month dropped across the board, with anticipated purchasing of electronics, such as smartphones, personal computers, laptops and tablets, pulling back by more than 1% despite the upcoming holiday tech-buying season.
In the Present Situation Index, gains came as 21.4% of consumers said business conditions were good, up from 18.8% in September; and 17.8% said business conditions were bad, down from 20%.
As they considered the labor market, 26.7% of consumers said jobs were plentiful, up from 24.3% in September; and 21.4% of consumers said jobs were hard to get, unchanged from a month past.
Expectations out six months were a little rosier, as 17.7% of consumers expected business conditions to improve, up from 16.5% in September; and 20.7% expected them to worsen, down from 25.2%. In terms of the labor market, 15.2% of consumers expected more jobs to be available six months out, up from 14.7% in September; and 26.3% expecting fewer jobs, down from 27.6% month over month.
Consumer income prospect assessments also improved with 18.7% of consumers anticipating higher incomes, up from 18.1% in September; and 12% anticipating declining incomes, down from 14.9%.
Consumer sentiments regarding their Family’s Current Financial Situation finally trended up a bit in October after two weak months, the Conference Board reported. Views of their Family’s Future Financial Situation over the next six months trended up slightly. Asked to assess the likelihood of a recession in the United States over the next 12 months, “somewhat likely” remained the answer most consumers chose.
The average 12-month inflation expectations declined in October but remained elevated at 5.8%. Consumers still expected to confront higher interest rates over the next 12 months. More consumers surveyed in October thought stock prices would increase rather than decrease over the next 12 months.
Expectations of services over the next six months were generally lower, except for movies, theater, live entertainment and sporting events. Top five categories in services spending plans were restaurants, bars, take-out; streaming, Internet, mobile services; utilities; health care; and beauty and personal care. Expected spending in the beauty nd personal care designation fell from third to fifth place among services categories, the Conference Board pointed out.
Spending plans regarding hotels and airfare for personal travel moderated, as did vacation planning, with 43.3% of consumers looking at taking a vacation in the next six months, down 0.9 points from an upwardly revised 44.2% in September. More consumers planned to take domestic trips and fewer anticipated visits to foreign countries, the Conference Board stated.
On a six-month moving average basis, only consumers under age 35 and those with a household income of $100,000 or more expressed increased confidence. By generation, confidence among Gen X, Baby Boomers and the Silent Generation consumers continued to trail significantly behind that expressed by Gen Z and Millennials, widening a generational divide that has emerged over the past two years, the Conference Board maintained.
“Consumer confidence advanced in October, driven primarily by improved perceptions of current and expected business conditions,” said Fergus McCormick, Conference Board senior economist, global indicators. “The recovery was in line with retail gasoline prices easing from September to October. Yet, despite the increase in October, consumer confidence remained on the long-term downward trend that’s persisted over the past few years. Consumers planned less spending on services and durable goods over the next six months. This likely reflected higher price levels and persistent inflation, which eroded consumers’ purchasing power.”
Among write-in responses to the Conference Board survey, consumers continued to bring up frustration with rising costs. References to the high cost of food and groceries, as wreak as increased oil and diesel prices gained. Comments about war and conflict eased for a second straight month but remained elevated, while concerns about jobs and employment ticked up, McCormick said.
