It could be that fall is in the air, or consumers are getting a jump start on their holiday shopping, but the latest consumer sentiment report shows that consumers have a renewed itch to spend.
The University of Michigan-Thomson Reuters consumer-sentiment gauge for October jumped to pre-recession levels and a five-year high.
Settling at a final reading of 78.3 in September, consumer confidence grew to 83.1 in preliminary October reports. These numbers exceeded economists’ expectations of a slight decline to 78.
The report, which gauges consumer views on both their own personal finances and perceptions on buying conditions, gives an indication of future spending.
Economists attribute the increase to stock and home prices and decrease in unemployment claims and foreclosures. This boost in consumer confidence is expected to have a positive impact on holiday sales and may influence the upcoming presidential election.