Consumer confidence unexpectedly rose in October from the previous month, indicating the biggest part of the economy will help keep the U.S. recovery intact.
The Thomson Reuters/University of Michigan final index of consumer sentiment climbed to 60.9 from 59.4 in September. The preliminary reading for the month was 57.5.
“Consumers are not throwing caution to the winds, but their mood has lifted slightly from the recession-type readings late this summer,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, who forecast a reading of 60. “The stock market is sharply higher and the consumer is back in a spending mind frame.”
The index averaged 89 in the five years leading up to the recession that began in December, 2007.
The Michigan survey’s index of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars, rose to a three-month high of 75.8 from 74.9 the prior month.
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, rose to 51.8, also the highest since July, from 49.4.