Consumer Sentiment Holds Steady And Strong

Consumer sentiment held steady and very strong over the last two weeks as consumer sentiment, after a 101.1 showing for preliminary October, ends the month at 100.7. Strength is evenly split between expectations, at 90.5 for a 6.1 point gain from September, and current conditions, at 116.5 for a 4.8 point gain. This is the best showing for this report in nearly 14 years.

Personal finances are near record levels reflecting gains for personal income as well as strength in home and stock values. The report says consumers are unusually optimistic on the economy, expecting good times during the year ahead and over the next 5 years as well and without interruption.

But inflation expectations remain very low, at 2.4 percent for the 1-year outlook which is down a steep 3 tenths from September and unchanged at 2.5 percent for the 5-year outlook. The report notes that low inflation rates together with high employment make low rates of income growth acceptable.

Though consumer spending has remained in the moderate category, strong confidence has been the most striking element of the 2017 economy.

Recent History Of This Indicator:
The consumer sentiment index burst higher in mid-month October to 101.1 for the best showing in 13 years. Full employment is a main factor boosting confidence while low rates of inflation are helping purchasing power. Inflation readings in this report have been unusually weak, at only 2.3 percent for the year-ahead outlook. Despite a wide range of estimates, Econoday's consensus is for little change in final October, at 101.0.