• Consumer confidence jumped 9.5 points to 108.7 in October, putting confidence at the highest level since January 2024. Moreover, that is the largest monthly gain since March 2021.
• The increase was broad-based with the present situation component jumping 14.2 points and the expectations component rising a more modest 6.3 points.
• The increase was widespread across all age groups with the sharpest jump for those aged 35-54. On a six-month moving average basis, householders under age 35 and those earning over $100,000 remained the most confident.
• The differential between those who view jobs as plentiful and those who view jobs as hard to get rose 5.6 points to 18.3%, the highest since June 2024.
• The percent of consumers expecting a recession in the next 12 months fell to its lowest since the question was first posed in July 2022; consumers’ average one year ahead inflation expectations increased to 5.3% in October from 5.2% in September.   

Consumer confidence improved sharply to 108.7 in October from 99.2 in September according to the Conference Board, the strongest monthly gain since March 2021. Furthermore, confidence is at the highest level since January 2024 (110.9). The improvement was broad-based with the present situation index jumping 14.2 points to 138.0 (the highest since May 2024) and the expectations index increasing a more modest 6.3 points to 89.1, but well above the threshold of 80 that normally indicates a recession.

In addition to the improvement in the present situation and expectations indexes, consumers’ views on the availability of jobs rebounded after a short period of weakness, and for the first time since July 2023, consumers were more optimistic about the future availability of jobs. The differential between those who view jobs as plentiful and those who view jobs as hard to get rose 5.6 points to 18.3%, the highest since June 2024. This month’s increase in confidence was broad-based across all age groups with the sharpest jump in those between the ages of 35 and 54. On a six-month moving average basis, householders under 35 years old and those earning over $100K remained the most confident.  

Consumers’ plans to purchase an auto improved to 13.0% from 11.9%, while those planning to purchase a home was unchanged at 5.8%. The percent of consumers who expected their income to increase was unchanged at 18.9%, while the percent who anticipated a decrease dipped slightly to 12.8% from 12.9% in September. 

The percent of consumers expecting a recession in the next 12 months fell to its lowest since the question was first posed in July 2022, with just under two-thirds of respondents believing that a recession is either somewhat or very likely in the next 12 months. On a more discouraging note, consumers’ average one year ahead inflation expectations increased to 5.3% in October from 5.2% in September. That is the second consecutive monthly increase.   

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