October 2017 Consumer Attitudes

Consumers are chuffed with the economy according to two popular measures of consumer attitudes.  In October 2017, both measures reached levels not seen in over a decade.  Consumer Confidence jumped 5.3 points to 125.9 according to the Conference Board, a 17-year high.  The University of Michigan’s Consumer Sentiment recorded a tally of 100.7 or the best level in nearly 14 years. 

Labor market conditions worked favorably for both indicators.  Data from the Conference Board reflect strong hiring; just 17.5 percent of the sample indicated jobs are hard to get, a very low level and down 0.5 percentage point from a month earlier.  This group also has a positive outlook for the jobs market as just 11.8 percent consider themselves pessimists regarding the future for hiring.  Those polled by the Conference Board reported strong gains in personal income.  This could translate to additional spending in the months ahead.

Expectations improved in the period as well.  More Americans believe stock market gains will continue as the gap widened between the bulls (42.1 percent) and the bears (23.2 percent) according to Consumer Confidence.  Meanwhile, Consumer Sentiment shows Americans expect good times over the next twelve months.  Additionally, they believe the virtuous segment of the business cycle will last another five years, uninterrupted! 

Many of our indicators actually do suggest the economy is gaining steam; American consumers seem to agree.  In theory, this added optimism should positively impact the economy in the months ahead.  Recent economic growth has been gaining strength and positive attitudes should help keep this inertia going.