US Consumer Confidence Jumps to 91.7 in October, Beating Forecasts by a Wide Margin

US consumer confidence rose sharply in October, beating forecasts by a wide margin. The Conference Board Consumer Confidence Index rose 7.5 points to 91.7, up from an upwardly revised 84.2 in September.

Economists polled by Reuters had forecast the index at 81, following a previously reported September reading of 81.9. The October result was a large beat against that expectation, and it revived confidence to June levels.

Both parts of the index rose

The Present Situation Index rose 8.6 points to 120.4. The Expectations Index recovered 6.9 points to 72.6, only partially reversing three consecutive monthly declines.

Fergus McCormick, senior economist for global indicators at the Conference Board, said: "Consumer confidence advanced in October, driven primarily by improved perceptions of current and expected business conditions." He told Reuters the recovery was in line with retail gasoline prices easing from September to October.

Jobs look a little better, prices still weigh

The labor market differential improved 2.4 percentage points to plus 5.3 percent. That measure is the share of consumers saying jobs are plentiful minus the share saying jobs are hard to get. In October, 26.7 percent said jobs were plentiful and 21.4 percent said jobs were hard to get.

Price pressure has eased in consumers' expectations but has not gone away. Average 12 month inflation expectations declined in October but remained elevated at 5.8 percent, and consumers still expected higher interest rates over the next 12 months.

September shows why the October rise matters. September was first reported at 81.9, a reading Barron's described as the lowest since 2014, before the figure was revised up to 84.2. October's survey cutoff was October 21.

A different survey points the other way

A separate University of Michigan survey found consumer sentiment ticked slightly lower in October, hovering near record low levels in its final reading before the November midterm elections. The two surveys measure different samples and ask different questions, and in October they moved in opposite directions.

The Conference Board release came on the first day of the Federal Reserve's two day policy meeting, with a rate decision expected on Wednesday. Market reporting cited by Reuters expects the Fed to hold rates in the 3.75 to 4.00 percent range.

For now, the Conference Board reading says households felt better about business conditions, jobs and the near term in October than they did in September. The Michigan reading says sentiment stayed close to record lows. Both were published before voters head into the November midterms, and both will be tested by the Fed decision and the next round of price data.