Consumer confidence soared in October to the highest level since before the recession began, the Conference Board reported Tuesday.
The Conference Board’s Consumer Confidence Index rose from 89 in September to 94.5 in October, beating economists’ expectations. Tuesday’s mark is the highest since October 2007, just before the official beginning of the recession that lasted from December 2007 to June 2009.
“Looking ahead, consumers have regained confidence in the short-term outlook for the economy and labor market, and are more optimistic about their future earnings potential,” said Lynn Franco, the Conference Board’s director of Economic Indicators, adding that “with the holiday season around the corner, this boost in confidence should be a welcome sign for retailers.”
The Conference Board’s index is based on a mailed survey of about 3,000 households conducted by the Nielsen Co.
Other surveys conducted by Gallup and retailers also suggest that U.S. families are planning to increase spending on holiday-related items, especially gifts, this year.
Broad measures of consumers’ attitudes published by the Conference Board and the University of Michigan have shown steady improvement in 2014 after plunging in late 2013 as congressional disagreement led to a government shutdown and a stand-off over the federal debt limit.
As the unemployment rate has dropped and job growth has picked up over the year, however, consumer sentiment has improved to roughly where it was before the financial crisis.
Tuesday’s release showed that Americans are optimistic about economic growth in the short term, with the expectations index spiking from 86.4 to 95 and indices for the business outlook and the availability of jobs also rising.
