Consumer Confidence Roars to 18-Year High Ahead of Holidays

By Douglas A. McIntyre Updated Jan 11, 3:38PM EST · Published Oct 30, 11:45AM EDT

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Consumer Confidence Roars to 18-Year High Ahead of Holidays — © kate_sept2004 / Getty Images

The U.S. economy continues to be a mighty engine. Consumer confidence reached an 18-year high this month. Marry that to low unemployment and sharply rising gross domestic product, and America enters the critical holiday retail period at full speed.

According to the Conference Board’s Consumer Confidence Survey, its primary index reached 137.9 (1985=100), up from 135.3 in September. The association has two other measures of consumer health. The first is the Present Situation Index, which relies on data on consumers’ opinions of current business and labor market conditions. It moved from 169.4 in September to 172.8. The Expectations Index is based on data concerning consumers’ short-term outlooks for income, business and labor market conditions. This rose from 112.5 in September to 114.6.

As the survey was released, Lynn Franco, Senior Director of Economic Indicators at the Conference Board, said:

Consumer Confidence increased in October, following a modest gain in September, and remains at levels last seen in the fall of 2000 (September 2000, 142.5). Consumers’ assessment of present-day conditions remains quite positive, primarily due to strong employment growth. The Expectations Index posted another gain in October, suggesting that consumers do not foresee the economy losing steam anytime soon. Rather, they expect the strong pace of growth to carry over into early 2019.

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On a more detailed basis, people who think jobs are “plentiful” rose to 44.1% to 45.9%. Those who claimed jobs are “hard to get” dropped from 14.1% to 13.2%. Those who were optimistic about the “short-term future” increased further from 25.8% to 26.3%.

The results likely will be very favorable for the economy near term. Most experts say that consumer activity is at least two-thirds of gross domestic product. And that activity peaks in the holiday season, which traditionally runs from November 1 until the end of the year. The National Retail Federation expects retail sales to rise between 4.3% and 4.8% over 2017 to between $717.45 billion and $720.89 billion.

Finally, the economy is often a virtuous cycle, one in which consumer spending drives employment and employment drives gross domestic product. For the next few months, the economy has a green light.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.