Confidence among American consumers surged to an 18-year high in October amid optimism about the outlook for both jobs and the broader economy, according to figures released Tuesday, Oct. 30, by the Conference Board.
The Conference Board said its consumer confidence index rose to 137.9 in October from a downwardly revised 135.3 in September. Economists had expected the index to drop to 136.3 from the 138.4 originally reported for the previous month. It's the highest level for the index since reaching 142.5 in September 2000.
The figures confirm that one of the strongest job markets in U.S. history is propelling household confidence as well as Americans' purchases, which account for about 70% of economic growth. They also bode well for the crucial upcoming holiday shopping season.
"Consumers' assessment of present-day conditions remains quite positive, primarily due to strong employment growth," Lynn Franco, director of economic indicators at the New York-based Conference Board, said in a statement.
The share of consumers saying current business conditions are good and jobs are plentiful increased from the prior month. Outlooks improved for the economy and incomes, while a slightly smaller share said more jobs would be available in the next six months.
The labor differential, which measures the gap between respondents saying jobs are plentiful and those who say they're hard to get, jumped to 32.7 percentage points, the widest since January 2001.
Even though sentiment remains relatively strong, clouds over the outlook include U.S. tariffs on imports from China, which the Trump administration plans to escalate in January. That may drive up prices of items that Americans use in their daily lives, at a time wages are still rising only modestly.
That said, the Conference Board's expectations gauge indicates "that consumers do not foresee the economy losing steam anytime soon," said Franco. "Rather, they expect the strong pace of growth to carry over into early 2019."