A measure of U.S. consumer confidence rose in October to the highest level in nearly 17 years, pushed by Americans' favorable view of the job market.
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The Conference Board on Tuesday said its index of U.S. consumer confidence increased to 125.9 in October from a revised 120.6 in September. This eclipses the March level of 124.9 and marks the highest level for the confidence gauge since December 2000, when it was 128.6.
"Consumers' assessment of current conditions improved, boosted by the job market which had not received such favorable ratings since the summer of 2001," said Lynn Franco, the Conference Board's director of economic indicators.
Consumers' soaring confidence comes as the unemployment rate dropped to 4.2% in September, a level not seen since early 2001, because more Americans found jobs even as the labor force expanded.
"In recent months we've seen those job gains become even more broad-based, across income groups and certain demographic groups that weren't doing as well earlier in the recovery," said James Bohnaker, economist at IHS Markit. "It doesn't hurt that stock prices are going up. If nothing else, it is a psychological boost to an already strong labor market."
Consumers' outlook on present and future economic conditions brightened. An index tracking household attitudes about the present economic situation rose to 151.1 in October from 146.9 a month earlier, while the index tracking expectations about the future increased to 109.1 in October from 103.0 in September.
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The numbers follow other record-setting consumer-sentiment readings. A separate gauge of U.S. consumer sentiment, produced by the University of Michigan, hit its highest level since 2004 in October, rising to 100.7 from 95.1 in September.
"It feels like the Christmas retail season could be pretty good, eh?" said Stephen Stanley, chief economist at Amherst Pierpont Securities.
Those in the Consumer Confidence survey saying jobs were "plentiful" increased to 36.3% in October, compared with 32.7% in September, while those claiming jobs are "hard to get" decreased slightly. Business conditions were described as "good" in October by 34.5%, up from 33.4% a month earlier.
Economists follow these surveys on the basis that an increase in optimism should translate into increased consumer spending. Recently, consumer spending has gained positive momentum. Personal-consumption expenditures, a measure of household spending, increased a seasonally adjusted 1% in September from the prior month. The increase marked the largest month-over-month gain in eight years, the Commerce Department reported Monday.
"Consumers are placing a higher value on the stability of jobs. So the longer people are employed...that risk aversiveness tends to fade away a little bit and people tend to make more discretionary purchases," Mr. Bohnaker said.
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(END) Dow Jones Newswires
October 31, 2017 12:25 ET (16:25 GMT)