American consumers feeling much more confident as Election Day nears

[October 30, 2024]  By MATT OTT

WASHINGTON (AP) — American consumers are feeling quite a bit more confident this month as Election Day approaches, a business research group says.

The Conference Board said Tuesday that its consumer confidence index jumped to 108.7 in October from 99.2 in September. It was the biggest monthly gain since March of 2021. Analysts forecast a more modest reading of 99.3.

The consumer confidence index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.

The measure of Americans’ short-term expectations for income, business and the job market jumped to 89.1. The Conference Board says a reading under 80 can signal a potential recession in the near future.

The proportion of consumers anticipating a recession in the next 12 months fell to its lowest level since the board first posed the question as part of its survey in July of 2022.

The board reported Tuesday that consumers’ view of current conditions climbed 14.2 points to a reading of 138.

The number of respondents saying they planned to buy a home or car continued to rise.

“Consumers’ assessments of current business conditions turned positive,” said Dana Peterson, the Conference Board's chief economist. “Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data.”

While there has been some recent data showing a weakening labor market, it broadly remains healthy by historical standards.

Shoppers peruse merchandise at a Kohl's in Ramsey, N.J., Oct. 10, 2024. (AP Photo/Seth Wenig, File)

The government reported earlier this month that the U.S. economy added 254,000 jobs in September, much more than was forecast. The unemployment rate dipped to 4.1%. The October jobs report comes out Friday.

Also Tuesday, the Labor Department reported that U.S. job openings tumbled last month to their lowest level since January 2021, possibly signaling that the labor market is losing some momentum. Still, openings remain well above pre-pandemic levels.

Tepid jobs numbers from July and August had been dragging on Americans' confidence and along with receding inflation, played a significant role in the Federal Reserve’s decision to cut its benchmark borrowing rate by 50 basis points, double the usual amount.

The rate cut, the Fed’s first in more than four years, reflected its new focus on bolstering a softening job market.

Fed policymakers also signaled that they expect to cut their key rate by an additional half-point in their final two meetings this year, and they envision four more rate cuts in 2025 and two in 2026.

Consumer spending accounts for nearly 70% of U.S. economic activity and is closely watched by economists for signs how the American consumer is feeling.

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