US consumer confidence hits seven-year high

 
Julian Harris
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AMERICAN consumer confidence shot up to a seven-year high this month, according to an industry survey published yesterday.

With Thanksgiving and Christmas coming up in the next couple of months, the Conference Board’s findings will provide a boost to retailers across the pond.

Respondents to the survey were more optimistic about both the US jobs market and American business conditions, resulting in the highest consumer confidence score since October 2007.

The index climbed to a score of 94.5 in October, from an upwardly revised reading of 89 in September.

“The score was stronger than our forecast and consensus expectations of 87,” said Barclays analyst Jesse Hurwitz yesterday.

“The strong reading was driven by a surge in consumer expectations – up to 95, from 86.4 – which posted the largest monthly increase since June 2013. The solid start to the fourth quarter should bode well for consumer spending, which we expect to rise 2.5 per cent in real terms over the quarter.”

A strong end to the year would be a boon to retailers and the US economy as a whole, after figures earlier this month pointed to a slowdown in spending. Total retail sales fell 0.3 per cent in September, according to a Commerce Department report.

However, Lynn Franco of the Conference Board remains upbeat.

“Consumers have regained confidence in the short-term outlook for the economy and labor market, and are more optimistic about their future earnings potential,” Franco said. “With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers.”