Consumer confidence is at a new recovery high of 94.5, up from an upwardly revised 89.0 in September and surpassing the previous recovery high of 93.4 in August. The index was last this strong in October 2007, right at the beginning of the Great Recession.
October’s gain is concentrated almost entirely in the expectations component, which jumped 8.6 points to 95.0 in a reading that isn’t quite a recovery high but near one, next only to February 2011’s 97.5. The strength in expectations reflects optimism in the outlook for both jobs and income, both of which show convincing gains in this month’s report.
Showing only marginal strength is the present situation component which rose only 7 tenths to 93.7. Yet this is still a very strong reading, surpassed only once in the recovery in this year’s August reading of 93.9. Looking at details, the reading on jobs-hard-to get, at only 29.1 percent vs 29.4 percent in September, hints at strength for the October jobs report.
Inflation expectations ticked 1 tenth higher to plus 5.4 percent which, however, is very quiet for this reading. Buying plans in the report are soft especially for cars in a dip that may be payback from the summer’s very heavy sales.
The consumer sector has yet to kick into high gear this recovery though confidence data are beginning to hint that such a break out may be in the cards, perhaps as early as this holiday’s shopping season which is certain to get a boost from low gas prices.