Americans are emerging from a yearslong funk about the economy, with the presidential election just a week away.
The Conference Board’s latest consumer survey showed that Americans this month became more optimistic about the future of both the labor market and the broader US economy. The monthly survey’s Consumer Confidence Index jumped in October by the fastest clip since March 2021.
“October’s increase in confidence was broad-based across all age groups and most income groups,” Dana Peterson, The Conference Board’s chief economist, said in a release. “The proportion of consumers anticipating a recession over the next 12 months dropped to its lowest level since the question was first asked in July 2022, as did the percentage of consumers believing the economy was already in recession.”
Americans in the survey said they became more upbeat over recent stock market gains and lower interest rates, while signaling plans to purchase big-ticket items in the near future. In September, jitters over the job market’s health weighed on consumer confidence, but economic data after that showed that the job market remains solid. Americans took notice.
“Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data,” Peterson said.
Since the pandemic, numerous polls and surveys have showed that Americans feel sour about the economy amid higher prices and interest rates, despite data showing that the job market remains in good shape and that the economy has continued to grow at a healthy pace. That has proven to be a key obstacle for Vice President Kamala Harris as her campaign for US president is in the home stretch.
The White House touted the report, noting that it reflected “good real income growth, strong employment, and inflation that is back down to the level before the pandemic,” said Biden’s top economic adviser, Lael Brainard, in a statement.
Better job market, better moods?
Data for September pointed to a robust job market, which translated into better consumer confidence. A fresh batch of data for October is due this week, which could determine if America’s economic mood continues to improve.
“Consumer confidence rose mainly due to optimism about the labor market, which will be important to remember when the jobs report comes out Friday,” said Robert Frick, corporate economist at Navy Federal Credit Union, in a note.
A separate report released Tuesday showed that America’s labor market lost some more momentum recently. Job openings, a proxy for employer demand for workers, fell to 7.4 million on the last day of September, down from August’s revised tally of 7.86 million. Job openings have essentially returned to pre-pandemic levels.
The October jobs report, slated for Friday, could be difficult to translate due to the effects from recent hurricanes and labor strikes. A worse-than-expected report, even after factoring in the disruptions from the strikes and natural disasters, could have an effect on consumer moods.
