The Conference Board’s measure of consumer confidence improved in October to 137.9, beating economist expectations and rising from September’s revised reading of 135.3. That improvement reflected an improving assessment of both current conditions and a rosier disposition about the near-term outlook.
As has been the case for some time, the strength of the labor markets continue to play a critical role in supporting the overall consumer mood. With unemployment and layoffs both near half-century lows and job creation still running strong, consumers feel good about their current circumstances.
Overwhelmingly, consumers see jobs as being easy to find, which also suggests greater possibilities for those already employed to change jobs, creating a positive ripple effect. As workers “move up” into more attractive positions, an opportunity is created for others to back fill those vacated jobs as well.
All of this points to the intense competition for skilled labor, the growing need for job training to fill open positions, and the potential for stronger wage gains. While formal data on hourly wages still suggest moderate growth, anecdotal evidence indicates that wage growth across various industries and regions has picked up.
Recent equity market volatility has not been fully reflected in recent surveys on the consumer outlook and could still have a dampening effect should it persist. Still, as long as the economy remains on track, any negative effect from a brief downturn in the stock market should be short lived.
Ultimately, the consumer story remains largely unchanged. Jobs are plentiful and the economy remains on a solid growth trajectory. Consumers see that, and remain quite upbeat about their situation. That bodes well for consumer spending, and should support the current virtuous cycle in the economy.
Data sources for peer group comparisons, returns, and standard statistical data are provided by the sources referenced and are based on data obtained from recognized statistical services or other sources believed to be reliable. However, some or all information has not been verified prior to the analysis, and we do not make any representations as to its accuracy or completeness. Any analysis non-factual in nature constitutes only current opinions, which are subject to change. Benchmarks or indices are included for information purposes only to reflect the current market environment; no index is a directly tradable investment. There may be instances when consultant opinions regarding any fundamental or quantitative analysis may not agree.
Plante Moran Financial Advisors (PMFA) publishes this update to convey general information about market conditions and not for the purpose of providing investment advice. Investment in any of the companies or sectors mentioned herein may not be appropriate for you. You should consult a representative from PMFA for investment advice regarding your own situation.