• Appraisal of current conditions & expectations rebound.

• Job market indexes are mixed.

• Price inflation expectations surge.

The Conference Board Consumer Confidence Index increased 3.6% to 113.8 (12.2% y/y) during October from 109.8 in September, revised from 109.3. The rise followed three months of decline. An October reading of 109.0 had been expected in the Action Economics Forecast Survey.

The Conference Board indicated that the rise in confidence occurred as "concerns about the spread of the Delta variant eased."

The Present Situation index rose 2.1% this month (38.3% y/y) to 147.4 following 3.1% September decline to 144.3, revised from 143.4. The Consumer Expectations reading improved 5.3% (-7.0% y/y) to 91.3 in October after falling 6.6% in September to 86.7, revised from 86.6.

The jobs gap, representing the difference between respondents indicating that jobs are plentiful and those saying jobs are hard to get, rose to 45.0% from 43.5% in September, revised from 42.5%. This series has a 71% correlation with the unemployment rate over the last ten years. The jobs plentiful measure eased to 55.6% this month but remained near its record high. The jobs hard-to-get measure fell to 10.6%, the lowest level since June. These declines were countered by a rise in the jobs-not-so-plentiful reading to 33.8, its highest level since June. It remained down sharply, however, from the 2020 highs. 

Current business conditions were perceived as good by a greatly lessened 18.6% of respondents in October, down from a high of 25.2% in June. Expectations that business conditions would improve in six months rose modestly to 24.3% of respondents, but that remained well below the 2020 highs. More jobs were expected in six months by a modestly increased 25.4% of respondents. The percentage expecting rising income improved slightly to 18.7%, but that was well below the 2019 highs.

The expected inflation rate in twelve months rose sharply to 7.0% from 6.5% in September and remained up from a 4.4% low in January of last year. The share of respondents planning to buy a new home within six months rose to 0.8%, the highest level since March. Those planning to buy a major appliance rose modestly to 49.0%.

Confidence of individuals under 35 years rose modestly after falling sharply in each of the prior three months. Confidence amongst those between 35 and 54 exhibited a similar movement. Confidence amongst individuals 55 and over has been at the same level for three months but well below this spring.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.