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Key Takeaways
- Consumer confidence moved up to 108.7 in October, a jump from 99.2 in September, and the biggest increase since March 2021.
- More people in October said jobs were plentiful, while fewer said employment was hard to find, helping push confidence to higher levels.
- Inflation is still a concern for many consumers, though more pointed out that they were seeing lower grocery prices.
Consumer confidence jumped the most since 2021 in October, as people are feeling better about the job market despite still worrying about high prices.
The Consumer Confidence Index jumped in October to 108.7 from the prior month’s reading of 99.2, the biggest increase in the index since March 2021. The bounce back comes after the index in September produced its biggest decline in three years.
The report from The Conference Board showed that consumers’ view of current business conditions turned positive. The number of respondents in the survey who are anticipating an economic recession fell to the lowest levels since July 2022.
Consumers Are Optimistic About the Job Market
At the same time, their assessment of the labor market also improved after several sluggish months of data.
In the survey, more people said that jobs were “plentiful” in October, while fewer described them as “hard to get,” with the difference between the two reaching its widest gap in five months, according to Wells Fargo economists.
The survey could indicate that the labor market is still healthy from a job seeker perspective. A separate report on Tuesday showed job openings fell, but hiring rose last month.
Inflation Concerns Remain Despite Some Consumers Seeing Improvements
The consumer survey showed that many people are still worrying about inflation, despite price increases slowing down in recent months. The latest reading of the Consumer Price Index (CPI) inflation showed that prices rose at an annual rate of 2.4% in September, well lower than its recent peak of around 9% in summer 2022.
Consumers expect inflation will rise 5.3% over the next 12 months, up a tick from last month. While more respondents mentioned slower inflation and lower grocery prices this month than in prior months, inflation and prices were still the top concern for consumers, the report showed.
“The disconnect between lower inflation and still depressed confidence has stumped many forecasters. All the while, consumers have continued to report that it is high price levels that they find particularly worrying,” wrote Wells Fargo economists Shannon Seery Grein and Jeremiah Kohl.