WASHINGTON (10/29/14)--After September's pullback, the Conference Board Consumer Confidence Index blew past expectations and climbed 5.5 points in October to 94.5, a seven-year high (Economy.com Oct. 28).
Sentiments over current and future economic conditions improved, according to the index, driven in large part by a brighter outlook from buyers.
"The Conference Board survey is more labor-market heavy than most, and the recent rise probably indicates stronger job growth in better-paying fields is lifting buyers' spirits," said Nate Kelley, Moody's analyst (Economy.com).
The number of respondents who believe business conditions will improve over the next six months climbed to 19.6% from 19%, and the share of those who believe conditions will worsen over that stretch fell to 9.3% from 11.4%.
The majority (71.1%) believe, however, that conditions will stay the status quo.
Further, 16.8% of consumers believe more jobs will be available in the next six months, a 0.8% increase, and 13.9% believe that there will be fewer, down 3% from the prior month.
"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, director of economic indicators for The Conference Board (MarketWatch Oct. 28). "With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers."
The rosier consumer sentiment doesn't appear to be translating into stronger spending just yet.
Only 10.8% of respondents said they plan to purchase a car in the next six months, a 1.3% drop from September and the lowest reading since the spring.
The share of those who plan to buy a home stood pat at 5.1%, while 49.1% plan to buy a major appliance, nearly a 2.5% decline.