U.S. consumer sentiment unexpectedly surged to a 13-year high as Americans’ perceptions of the economy and their own finances rebounded following several major hurricanes, a University of Michigan survey showed Oct. 13.
Highlights of October Preliminary Michigan Sentiment Report
• Sentiment index rose to 101.1 (estimated 95), highest since Jan. 2004, from 95.1 in Sept.
• Current conditions gauge, which measures Americans’ perceptions of their finances, jumped to 116.4, highest since Nov. 2000, from 111.7
• Expectations measure increased to 91.3, highest since Jan. 2004, from 84.4.
The jump in sentiment, which was greater than any analyst had projected, may reflect several trends: falling gasoline prices following a hurricane-related spike; repeated record highs for the stock market; a 16-year low in unemployment; and post-storm recovery efforts driving a rebound in economic growth.
The advance in the main gauge spanned age and income subgroups as well as partisan views, according to the report. Almost six out of every 10 consumers thought the economy had recently improved in early October, the university said.
Not all measures in the survey showed big gains: the share of consumers reporting improved finances held steady at about half, while the proportion expecting gains in their financial situation fell slightly to 40%.
“While the early October surge indicates greater optimism about the future course of the economy, it also reflects an unmistakable sense among consumers that economic prospects are now about as good as could be expected,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “Indeed, nothing in the latest survey indicates that consumers anticipate an economic downturn anytime soon — which contrarians may consider a clear warning sign of trouble ahead.”
• 83% of respondents saw buying conditions for household durables as favorable, most in more than a decade; positive vehicle-buying attitudes at 75%, highest since 2004.
• Consumers saw inflation rate in the next year at 2.3% after 2.7% the prior month.
• Inflation rate over next five to 10 years seen at 2.4% after 2.5% in September.