Consumer confidence ticked up slightly in October, with Americans providing marginally sunnier assessments and projections of current and future business conditions.
The Conference Board’s Consumer Confidence Index rose overall by 7.5 points to 91.7 this month, up from 84.2 in September, with shoppers’ estimation of the present situation increasing 8.6 percent to 120.4. Their short-term outlook for business and labor market conditions, as well as their own incomes, bucked the three-month trend of declines, growing 6.9 points to 72.6.
“Consumer confidence advanced in October, driven primarily by improved perceptions of current and expected business conditions,” said Fergus McCormick, senior economist focused on global indicators at the Conference Board.
The Present Situation Index showed that net perceptions of business conditions—the number of consumers who would characterize the situation as “good” over “bad”—grew by 4.8 percentage points to 3.6 percent following a particularly downbeat September reading. The Expectations Index for business conditions rose 5.7 percentage points to -3.0 percent.
The outcomes could be considered a small but welcome October surprise for Republicans days ahead of the midterm elections.
According to McCormick, this month’s recovery lined up with a month-over-month easing of gas prices. But the economist cautioned against unearned optimism, saying that October’s numbers don’t necessarily represent a reversal of attitudes. Despite the single-digit increase, “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,” he added.
The economist pointed to write-in responses from survey respondents this month in which consumers voiced dissatisfaction with the continued rise in prices on food and other necessities. “Comments about war and conflict eased for a second straight month but remained elevated. Mentions of jobs and employment as an area of concern also ticked up, though to a lesser extent,” McCormick surmised.
Notably, on a six-month moving average basis, it was only consumers under 35 that make a household income of over $100,000 that expressed an increase in confidence. Other generational cohorts—the Silent Generation, Baby Boomers and Gen X—lagged behind Millennials and Gen Z in their improved outlook. The generational divide in confidence widened yet again, deepening a trend that has persisted for two years. And while confidence improved across the political spectrum, Republicans expressed the most improvement in sentiment.
One area that remains a sticking point for consumers is inflation. While their 12-month expectations declined, they still remained elevated at 5.8 percent, and they still expect to see higher interest rates over the course of the next year.
A separate survey conducted by the University of Michigan painted a slightly different picture of consumer sentiment, but illuminated the depth of shoppers’ inflation concerns.
The institution’s Survey of Consumers showed that consumer sentiment actually registered one-tenth of an index point below last month. While expectations for business conditions over the next 12 months improved by 14 percent, they are still 16 percent lower than the year-ago assessment.
According to the program’s director, Joanne Hsu, “[p]urchasing power continues to dominate consumer views of the economy,” with sentiment now 10 percent below October 2025 and 15 percent lower than February, before the Iran war started.
Consumers aren’t feeling confident that inflation will abate, according to Hsu’s research. Expectations for the next year rose from 4.6 percent last month to 4.7 percent this month, far surpassing the 3.4 percent seen in February and all readings taken in 2024. Long-term expectations for inflation grew from 3.4 percent in September to 3.5 percent in October.
“Inflation expectations over both time horizons increased for the second straight month to their highest readings since May,” Hsu’s report said.
“After five years of above-target inflation, both shortand long-term inflation expectations have ticked up in recent months, exposing risks that elevated inflation expectations could become entrenched,” she wrote.
If that happens, “[t]he adoption of inflationary psychology would lead consumers to shift purchases to the present to avoid higher prices in the future. En masse, robust ‘precautionary’ spending would generate further upward pressure on inflation, with elevated inflation expectations becoming self-fulfilling,” Hsu added.
While that outcome “may not be inevitable,” she said, current consumer perspectives and historical record “suggest that risks are present.”