US consumer confidence expected to rise

Economic IndicatorsAssociated Press

The Conference Board releases its October index on U.S. consumer confidence. The report will be issued Tuesday at 10 a.m. Eastern.

BUILDING BACK UP: Economists expect the index to edge slightly higher to 87 after falling sharply the previous month. Consumer confidence slumped to 86 in September from 93.4 in August, a level not seen since the recession began in late 2007.

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JOBS AND GAS: Solid job gains and falling gasoline prices should help to improve sentiment, despite muted economic growth in Europe and China that has created a lot of volatility in financial markets.

Steady hiring and fewer layoffs over the past 12 months have pushed unemployment lower. Employers added 248,000 jobs in September, helping to push the unemployment rate down to 5.9 percent, from as high as 7.2 percent. The new jobs mean more paychecks, which should lead to more spending and overall economic growth.

Economists project that the gains should continue into October with the addition of 235,000 more jobs, according to the data firm FactSet.

Also, Americans are likely feeling less depleted after a trip to the gas pump. Average gas prices have dipped 30 cents in the past month to $3.04 a gallon, according to the AAA's Daily Fuel Gauge Report, freeing up cash to spend elsewhere.

Still, shopping failed accelerate much in September.

Purchases of clothing dropped 1.2 percent last month and spending on building materials fell 1.1 percent, while auto-buying dipped after surging in August, the Commerce Department reported.