Consumer confidence is at a 7-year high!
The Conference Board’s index of confidence unexpectedly jumped to 94.5 in October from 89.0 in September. This is the highest level since October 2007.
This was much higher than the 87.0 level expected by economists.
The past month has been highlighted by falling gas prices, the positive effects of which may have offset uncertainties surround a volatile stock market, the spread of Ebola, and all of the other things that are going wrong in the world.
“A more favourable assessment of the current job market and business conditions contributed to the improvement in consumers’ view of the present situation,” said Lynn Franco of the Conference Board. “Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labour market, and are more optimistic about their future earnings potential. With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers.”
“We remain a bit nervous about the risk of a lagged hit from the drop in stock prices, but the net dip from the peak is now small, and gas prices are still falling,” Pantheon Macroeconomics’ Ian Shepherdson said. “Holiday shopping will be strong.”