US consumer confidence improved in October contrary to analysts’ expectations.
The Conference Board index, released Tuesday, stood at 113.8 points from 109.8 points in September. The result was surprising, as analysts expected a drop to 108 points.
“Consumer confidence improved in October, reversing the downward trend of the past three months, when concerns about the spread of the Delta variant (of Covid-19) dissipated,” said Lynn Franco, chief indicator of indicators. Conference Board financial statements.
The proportion of consumers surveyed who expect to buy houses, cars or appliances increased in October. “It is a sign that consumer spending will continue to sustain economic growth in the last months of 2021,” said Franco.
“Consumers are more optimistic after a difficult third quarter and that calls for a strong end to the economy in 2021,” said Christopher Rupkey, economist at FWDBONDS.
Consumers’ expectation for inflation for the next 12 months jumped to 7%, from 6.5% last month.
Despite perceptions of high inflation, more people intend to buy appliances such as washing machines, televisions and refrigerators over the next six months, suggesting that spending would regain strength after an apparent sharp slowdown last quarter.
Consumer spending this quarter is also likely to be driven by higher demand for travel. The percentage of consumers who say they plan to take a vacation in the next six months increased to 47.6 percent. That is the highest figure since the pandemic began and increased from 42.3% in September.
There was also good news in the housing market. The Conference Board survey showed that consumers are more inclined to buy a home in the next six months. The housing market could be driven by a moderation in prices.
A Commerce Department report on Tuesday showed new single-family home sales rose 14% to 800,000 units in September, the highest level in six months.