U.S. consumer confidence leapt to 108.7 in October, its highest level since January, according to data from the Conference Board released on Tuesday.
This strong rebound comes after a revised 99.2 reading in September, with October’s figure far exceeding Wall Street expectations of 99.5.
The October confidence surge fully offset the sharp decline experienced in September, signaling a notable shift in consumer sentiment.
The Conference Board does not track consumer confidence by party affiliation. Last week, the University of Michigan said its measure of consumer sentiment increased because Republicans became more confident that Donald Trump would win the presidential election.
The jump in consumer optimism reflects stronger confidence in both present and future economic conditions. The measure for current economic conditions surged 14.2 points to 138.0, while the six-month outlook rose 6.3 points to 89.1, suggesting that consumers feel both immediate and future conditions are improving.
In addition, the share of consumers anticipating a recession over the next 12 months has dropped to its lowest level since this question was first posed in July 2022. Consumers’ views on the job market also brightened, with the proportion of those saying jobs are “plentiful” increasing, while those seeing jobs as “hard to get” decreased to 16.8 percent.
While October’s figures mark an optimistic turn, the confidence index remains below the pre-pandemic level of 132.6 recorded in February 2020. Consumer confidence has seen a steady decline over the past year, reflecting inflation pressures, high interest rates, and broader economic concerns.
Economists had expected an improvement this month, largely due to rising stock prices and lower gasoline costs, which have eased some household pressures.
The Conference board says upcoming election was not a primary concern among respondents. It ranked ranked fifth in open-ended responses, it trailed behind mentions of prices, inflation, and food costs—a departure from October 2020 and 2016, when election concerns topped the list.
“Consumer confidence recorded the strongest monthly gain since March 2021,” said Dana Peterson, Chief Economist at the Conference Board. However, she added that confidence remains within the narrow range it has held over the last two years, underscoring lingering economic uncertainty.