- Prior was 81.9 (revised to 84.2)
- Present situation 120.4 vs 111.8 prior
- Expectations 72.6 vs 65.7 prior
This is a nice jump but it comes after the worst reading since 2014 so it’s still at extremely depressed levels. In any case, I struggle to see the value of this indicator as anything but a political barometer. That’s valuable ahead of the midterms but it doesn’t tell us much about spending. Royal Caribbean cruise lines and Hilton both reported earnings today and highlighted strong — if not strengthening demand. That skews affluent but that’s the economy right now.
Hilton CEO Christopher Nassetta said the company was seeing:
“momentum across our system, which we expect to continue for the remainder of the year and into 2027.”
RCL CEO Jason Liberty said:
“2027 bookings are pacing ahead of historical levels at higher rates.” and highlighted “continued strong consumer demand for our vacation experiences”.
In the release Fergus McCormick, Senior Economist, Global Indicators, The Conference Board said:
“Consumer confidence advanced in October, driven primarily by improved perceptions of current and expected business conditions… The recovery was in line with retail gasoline prices easing from September to October. Yet, despite the increase in October, consumer confidence remained on the long-term downward trend that’s persisted over the past few years. Consumers planned less spending on services and durable goods over the next six months. This likely reflected higher price levels and persistent inflation, which eroded consumers’ purchasing power.”
For background, the Conference Board’s Consumer Confidence Index is one of the two major monthly gauges of US household sentiment, alongside the University of Michigan survey. It’s released at 10 am ET on the last Tuesday of the month and is indexed to 100 in 1985.
The headline index is built from questions on current business and labor market conditions and on expectations for the next six months. It splits into two sub-indexes. The Present Situation Index captures views on business conditions and job availability now. The Expectations Index reflects views on business conditions, employment and income six months out. The Conference Board has flagged readings of the Expectations Index below 80 as a historical signal of recession ahead.
The survey leans more heavily on the job market than the Michigan survey does, which makes its labor questions some of the most watched in the report. Economists track the labor differential, the share of respondents saying jobs are “plentiful” minus those saying jobs are “hard to get.” It closely tracks the unemployment rate and can give an early hint of a softening job market before it shows up in payrolls.
The report also includes 12-month inflation expectations, plans to buy homes, cars and major appliances, and views on stock prices and interest rates. Write-in responses offer a sense of what’s on consumers’ minds, such as prices, tariffs, politics or jobs.
Like other sentiment surveys, consumer confidence doesn’t always line up with actual spending, and markets tend to react only to large surprises.
This article was written by Adam Button at investinglive.com.