U.S. Consumer Confidence Unexpectedly Sees Substantial Improvement In October

(RTTNews) - Consumer confidence in the U.S. has unexpectedly seen a substantial improvement in the month of October, according to a report released by the Conference Board on Tuesday.

The Conference Board said its consumer confidence index jumped to 91.7 in October from an upwardly revised 84.2 in September.

The sharp increase came as a surprise to economists, who had expected the consumer confidence index to dip to 80.4 from the 81.9 originally reported for the previous month.

"The recovery was in line with retail gasoline prices easing from September to October," said Fergus McCormick, Senior Economist, Global Indicators, The Conference Board. "Yet, despite the increase in October, consumer confidence remained on the long-term downward trend that's persisted over the past few years."

"Consumers planned less spending on services and durable goods over the next six months," he added. "This likely reflected higher price levels and persistent inflation, which eroded consumers' purchasing power."

The report also said the present situation index, which is based on consumers' assessment of current business and labor market conditions, shot up to 120.4 in October from 111.8 in September.

The expectations index, which is based on consumers' short-term outlook for income, business, and labor market conditions, also surged to 72.6 in October from 65.7 in September.

Last Friday, the University of Michigan released a separate report showing consumer sentiment in the U.S. deteriorated by far less than previously estimated in October.

The report said the University of Michigan's consumer sentiment index for October was upwardly revised to 48.0 from a preliminary reading of 46.3.

While the index is still down slightly from September's 48.1, economists had expected the preliminary reading to be unrevised.