WASHINGTON: US consumer confidence unexpectedly rose in October as concerns about high inflation were offset by improving labour market prospects, suggesting economic growth was picking up after a turbulent third quarter.
The survey from the Conference Board on Tuesday showed consumers eager to buy a home and big-ticket items such as motor vehicles and major household appliances over the next six months. The share of Americans planning to go on vacation was the largest since February 2020, just before the nation was slammed by the first wave of Covid-19 infections, report agencies.
“Consumers know the tight labour market has their backs. Those forecasting a recession from the drop in the confidence late in the summer will have to back off that call.” The consumer confidence index increased to a reading of 113.8 this month from 109.8 in September, ending three straight monthly declines.
The measure, which places more emphasis on the labor market, remains below its peak of 128.9 in June. The rise was in contrast with the University of Michigan’s survey of consumers, which showed sentiment ebbing early this month. Economists polled by Reuters had forecast that the index would dip to 108.3. The Conference Board’s so-called labour market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, raced to a reading of 45 this month, the highest in 21 years, from 43.5 in September.