Hurricanes, dysfunctional politics, football protests and maybe the approaching holiday season, nothing its seems can discourage the American consumer. Sentiment jumped to a 13-year high in October as satisfaction with the economy and personal finances soared.
The University of Michigan Consumer Sentiment Index rose to 101.1 from 95.1 in September. It was the highest reading since January 2004 and far ahead of the 95.0 median projection.
The current conditions gauge which measures Americans' perception of their personal finances, climbed to 116.4 in October, the best score since November 2000, from 111.7. Economists had predicted 111.3. The expectations index, which tracks consumer estimates for their situation in six months increased to 91.3 from 84.4. It was the best for this indicator since January 2004. This forecast was 84.7.
The increase in the sentiment index was larger than any predicted by analysts in the Bloomberg survey.
Jocularity aside, the U.S. economy is benefitting from several long-running positive trends.
Unemployment is at a 16-year low and even if wages are rising a good deal less than historical standards, they are improving on the very low rate of inflation. Gasoline prices have started to drop again following the Harvey related spike as U.S. shale drillers have added 10 percent to output this year. The stock market has reached repeated record highs, perhaps a reflection of optimism that President Trump's tax reform measures will pass and provide added impetus for the economy as should the rebuilding efforts from the Gulf and Florida storms.
The gain in the main sentiment index was widespread, crossing age, income and political views. Almost sixty percent of respondents said the economy had improved in the early October survey period.
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Michigan Consumer Survey