SILVER SPRING, Maryland (AP) – US consumer confidence rose in October after three straight falls as public concern about the delta variant of the coronavirus appears to have diminished.
The Conference Board said Tuesday that consumer confidence rose to 113.8 in October from 109.8 in September.
Consumer spending accounts for about 70% of all economic activity in the United States, so economists pay close attention to the numbers to better understand what awaits the national economy.
Consumer outlook on the current situation rose to 147.4 from 144.3, while the index of expectations for the future climbed to 91.33 from 86.7.
In addition to the delta option, short-term inflation concerns rose to a 13-year high, but the impact on confidence was negligible, said Lynn Franco, senior director of economic indicators at the Conference Board.
The latest Conference Board survey shows that the proportion of consumers planning to buy homes, cars and large appliances increased in October, a sign that consumer spending will continue to support economic growth through 2021. Nearly half of the respondents said they intend to take a vacation in the next six months. This is the highest since February 2020, just before the pandemic devastated the global economy.
The October rise in consumer confidence surprised analysts, who generally expected it to decline for the fourth time in a row.
Earlier this month, the Labor Department announced another spike in consumer prices in September, pushing inflation up 5.4% from a year ago. This represents the largest growth since 2008 as global supply chains continue to create chaos.
Last week, Federal Reserve Chairman Jerome Powell said the tangled supply chains and deficits that have plagued the U.S. economy since the summer have worsened and are likely to keep inflation high in 2022.
How these factors affected the July-September quarter will become more evident on Thursday, when the government releases its first look at economic growth, measured by gross domestic product, for the third quarter. Economists forecast annual GDP growth of about 3% in the third quarter, a marked slowdown from 6.1% growth in the first quarter and 6.7% in the second quarter.
The country’s economists are slightly less optimistic about growth prospects for next year, citing a range of threats ranging from the previously mentioned inflation, COVID-19 and disrupted supply chains.
On Monday, the National Association for Business Economics released a new report, according to which 66% of NABE members who responded to the survey expect the economy to grow 3-5.9% next year, while 28% were less optimistic, holding growth in next year. at a much slower rate of 0.1% to 2.9%.