A monthly measure of consumer confidence has climbed to its highest level in almost 17 years on more upbeat assessments of labor and business and conditions that portend continued growth.
The Conference Board reported its Consumer Confidence Index rose 5.3 points to 125.9 in October. That’s the highest reading since the index stood at 128.6 in December 2000.
Components of the index tracking consumer appraisals of current conditions as well as their expectations for the future both increased.
“Consumers’ assessment of current conditions improved, boosted by the job market, which had not received such favorable ratings since the summer of 2001,” said Lynn Franco, director of economic indicators at the Conference Board. “Consumers were also considerably more upbeat about the short-term outlook, with the prospect of improving business conditions as the primary driver. Confidence remains high among consumers, and their expectations suggest the economy will continue expanding at a solid pace for the remainder of the year.”
The business research and membership group bases the index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity.
For October, the present situation component of the index rose 4.2 points to 151.1.
The proportion of consumers responding to the survey upon which the October index was based who described business conditions as “good” rose 1.1 points to 34.5 percent. The share of those who called conditions “bad” edged up three-tenths of a point to 13.5 percent.
The proportion of consumers who characterized jobs as “plentiful” rose 3.6 points to 36.3 percent. The share of those who said jobs are “hard to get” fell a half point to 17.5 percent.
The expectations portion of the index climbed 6.1 points to 109.1.
The share of consumers who said they expect business conditions to improve over the next six months rose 1.3 points to 22.2 percent. The proportion of those anticipating worsening conditions fell 2.7 points to 6.9 percent.
The share of consumers who expect more jobs to become available slipped three-tenths of a point to 18.9 percent. The proportion of those anticipating fewer job openings also fell — 1.2 points to 11.8 percent.
Meanwhile, 20.3 percent of consumers said they expect their incomes to increase, down two-tenths of a point. Another 7.4 percent of consumers said they expect less income, a drop of 1.2 points.