American consumer confidence soared to its highest level in almost seventeen years, defying hurricanes, presidential investigations and Congressional gridlock, reinforcing yesterday's strong consumption numbers and suggesting robust growth will continue into the fourth quarter.
The Conference Board reported that its sentiment index climbed to 125.9 in October from 120.6 in September. This was the highest reading for this poll, which combines Americans' current and six month views of economic conditions, since 128.6 in December 2000. Economists in the Reuters survey had forecast a score of 121.0.
The measure on present conditions jumped to 151.1, the best since 146.9 in 2001 and that of consumers' expectations in six months rose to 109.1, a seven month high, from 103.
These figures match several other recent statistics that show increasing strength in the economy and surging confidence among consumers whose spending constitutes 70 percent of U.S. economic activity.
The University of Michigan Consumer Sentiment Index registered 100.7 in October, the strongest since January 2004, and except for that one month, the best since November 2000. The current conditions index from the same survey came in at 116.5, the most sanguine Americans have felt about their economic situation since November 2000.
Third quarter annualized GDP continued at 3.0 percent, following the second quarter's 3.1 percent, according to the Bureau of Economic Analysis. Recent forecasts from the Atlanta Federal's Reserve's GDPNow model put the final three months of the year at 2.9 percent with a new update due on Wednesday November 1st. If the fourth quarter maintains the 3 percent pace it will be the first nine months that the U.S. economy has expanded at 3 percent or better in seven years.
Personal consumption rose 1.0 percent in in September the strongest for this key metric since August 2009. Durable goods orders were another bright spot, up 2.2 percent in September and capital goods purchases accelerated 1.3 percent, indicating that businesses are willing to invest because they foresee stronger demand ahead.
Purchasing managers’ surveys in both manufacturing and services were at multi-year highs in September. Unemployment last month was 4.2 percent, the lowest in almost seventeen years.
In addition U.S. equity indexes have repeatedly scored all-time records over the past 12 months. Yet through all this economic activity inflation remains quiescent, just 1.3 percent annually in the September core PCE price index.
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