October consumer confidence jumps to 91.7, well above the 81.0 forecast

• The prior reading of 81.9 was revised to 84.2.
• The present situation index stood at 120.4, versus 111.8 previously.
• The expectations index came in at 72.6, compared with 65.7 in the prior month.

The October improvement is substantial, but it follows the worst figure since 2014, meaning confidence remains deeply depressed. This index seems more useful as a political gauge than a spending indicator. It holds relevance ahead of the midterm elections but gives little insight into consumer outlays. Hilton and Royal Caribbean both released earnings today, citing robust or even strengthening demand. That demand is skewed toward wealthier consumers, but that reflects the current economic reality.

Hilton CEO Christopher Nassetta commented on the company's outlook:

"momentum across our system, which we expect to continue for the remainder of the year and into 2027."

RCL CEO Jason Liberty stated:

"2027 bookings are pacing ahead of historical levels at higher rates." and highlighted "continued strong consumer demand for our vacation experiences".

Fergus McCormick, Senior Economist at The Conference Board, said in the release:

"Consumer confidence advanced in October, driven primarily by improved perceptions of current and expected business conditions... The recovery was in line with retail gasoline prices easing from September to October. Yet, despite the increase in October, consumer confidence remained on the long-term downward trend that's persisted over the past few years. Consumers planned less spending on services and durable goods over the next six months. This likely reflected higher price levels and persistent inflation, which eroded consumers' purchasing power."

The Conference Board's Consumer Confidence Index is one of the two main monthly measures of US household sentiment, together with the University of Michigan survey. It is published at 10 am ET on the final Tuesday of each month and is indexed to a base of 100 in 1985.

The overall index is derived from questions about present business and labor market conditions as well as expectations for the coming six months. It divides into two sub-indexes. The Present Situation Index measures opinions on current business conditions and job availability. The Expectations Index gauges views on business conditions, employment and income six months from now. The Conference Board has noted that an Expectations Index reading below 80 has historically indicated a looming recession.

Compared with the Michigan survey, this index places greater weight on the labor market, so its employment-related questions are closely followed. Economists monitor the labor differential, calculated as the percentage of respondents who view jobs as "plentiful" minus those who see them as "hard to get." This measure closely correlates with the unemployment rate and may signal a weakening job market before it appears in payroll data.

The report also covers 12-month inflation expectations, intentions to purchase homes, cars and large appliances, as well as opinions on stock prices and interest rates. Open-ended responses provide insight into consumer concerns, including prices, tariffs, politics and employment.

As with similar sentiment surveys, consumer confidence does not consistently match actual expenditure, and financial markets generally respond only to significant deviations from expectations.