Consumer Confidence Hits Another Post-Recession High As Gasoline Prices Continue To Fall

Consumer sentiment, as tracked by Thomson Reuters/University of Michigan, posted another post-recession high in the final October reading, reaching 86.9. The result bested economists’ expectations and was up from the 86.4 reading mid-month. It was the highest reading since July 2007. The index is nearly 19% higher than at this time last year. The research group’s Index of Consumer Expectations also jumped to 79.6 from 75.4 in the prior month survey. The index stands 27.4% higher than a year ago.

Driving the gains in October were an improving outlook for personal finances as well as a more favorable view of the general economy. In both the September and October surveys, more households expected income gains than at any time in the last six years. The median expected increase at 1.1% was the highest since September 2008.”Finally, five years after the start of the recovery, consumers have begun to adopt the expectations and behaviors that have driven past expansions,” said Richard Curtin, UM Survey of Consumers chief economist

The Conference Board’s Consumer Confidence Index also rose sharply in October to 94.5, up from 89 in September. Lynn Franco, director of economic indicators at The Conference Board, said, “A more favorable assessment of the current job market and business conditions contributed to the improvement.”

Underpinning some of the rise in consumer confidence is the continuing decline of gasoline prices. The average price of a gallon of regular gasoline at the national level stood at $2.933 on Nov. 9, down 5.4 cents in the past week and down 32.1 cents in the past month alone, according to AAA’s Daily Fuel Gauge Report. Gas prices could continue to drop as the price of crude oil is still falling.