The Conference Board said Tuesday consumer confidence exploded in October to a new 17-year high and September was revised higher to 126.2. The Consumer Confidence Index now stands at 129.5 (1985=100), up from 126.2 in October and easily topping the 124.5 median forecast.
The Present Situation Index continued to increase from 152.0 to 153.9, while the Expectations Index rose from 109.0 last month to 113.3.
“Consumer confidence increased for a fifth consecutive month and remains at a 17-year high (Nov. 2000, 132.6),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved moderately, while their expectations regarding the short-term outlook improved more so, driven primarily by optimism of further improvements in the labor market.”
Consumers’ assessment of current conditions also improved modestly in November, as the percentage of those saying business conditions are “good” gained from 34.4% to 34.9%. The percentage of those saying business conditions are “bad” fell from 13.5% to 12.7%.
“Consumers are entering the holiday season in very high spirits and foresee the economy expanding at a healthy pace into the early months of 2018,” Ms. Franco added.
Consumers’ assessment of the labor market also continued to improved, unsurprisingly. Demand for labor is strong and labor market indicators such as employment and wages are improving. The percentage of those stating jobs are “plentiful” increased from 36.7% to 37.1%, while those claiming jobs are “hard to get” ticked down slightly from 17.1% to 16.9%.
Short-term optimism was also more favorable in November.
The percentage of consumers expecting business conditions to improve over the next six months increased slightly from 22.1% to 22.4%, while those expecting business conditions to worsen decreased from 7.0% to 6.5%.
The same is true for consumers’ outlook for the job market since October.
The percentage expecting more jobs in the months ahead increased significantly from 18.7% to 22.6%, while those anticipating fewer jobs fell slightly from 11.6% to 11.0%. Regarding their short-term income prospects, the percentage of consumers expecting an improvement fell marginally from 20.3% to 20.1%, while the proportion expecting a decrease was essentially unchanged at 7.6%.
About the Consumer Confidence Index
The monthly Consumer Confidence Index is based on a probability-design random sample and is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was November 14. Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. The S&P 500 company operates in over 100 countries and covers more than 90% of the world’s population.