October 2018 Conference Board Consumer Confidence Modestly Improves

The latest Conference Board Consumer Confidence Index’s headline number is 137.9 (1985=100), up from 135.3 in September.

Analyst Opinion of Conference Board Consumer Confidence

Consumer confidence has been on a multi-year upswing – and this upswing is roughly correlating with increases in consumer spending.

The consensus range from Econoday was 133.0 to 138.0 (consensus 136.0). This month’s index is based on data collected through 18 October 2018.

Per Lynn Franco, Director of Economic Indicators at The Conference Board:

Consumer Confidence increased in October, following a modest gain in September, and remains at levels last seen in the fall of 2000 (September 2000, 142.5). Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth. The Expectations Index posted another gain in October, suggesting that consumers do not foresee the economy losing steam anytime soon. Rather, they expect the strong pace of growth to carry over into early 2019.

Analysis from Econoday:

The consumer confidence index continues to hold near 18-year highs, at 137.9 in October vs a revised 135.3 in September. The index remains within striking distance of the all-time high at 144.7 reached in 2000.

A closely watched reading in this report, one used by forecasters to track the monthly employment report, is pointing to increasing strength for the labor market. Those saying jobs are currently hard-to-get fell nearly 1 percentage point to 13.2 percent. Strength in the labor market is also indicated by a 1.8 percentage rise in a less closely watched reading: those who say jobs are currently plentiful which is now at 45.9 percent.

The 6-month outlook for jobs remains upbeat with 2 tenths more saying more jobs will open up, at 22.1 percent, and with fewer saying there will be fewer jobs ahead, down 9 tenths to 11.4 percent. And there’s a positive signal from a key reading on the outlook side and that’s the percentage who see their income rising, up 2.2 points to 24.7 percent.

Inflation expectations are at 4.8 percent which is subdued for this particular reading but nevertheless are up 1 tenth in the month. Buying plans are steady with autos inching higher at a solid 13.8 percent and with homes rising 2 tenths to a still moderate 6.4 percent.

Those who see interest rates rising over the next year are at a sizable 72.8 percent for a 4.7 percentage point rise in the month that no doubt is tied to the Federal Reserve’s plans for further rate increases. On stocks, the sample’s bullishness despite recent volatility continues to rise, to 44.5 percent and a 2.6 point monthly gain with bears down 2.6 points to 19.1 percent.

This report is unmistakably strong and points to not only a solid employment report but also hints at another month of strength for consumer spending.