U.S. consumer sentiment has made a big comeback in October, suggesting that the economic recovery remains on track, even in the face of a weakening global market.
According to the report, issued by The University of Michigan, consumers are offering robust domestic demand.
Its consumer sentiment index rose to 92.1 in early October from a reading of 87.2 in September. The survey’s current conditions sub-index shot up to 106.7 this month from 101.2 in September.
The index has been historical accurate with a 4 percent annualized rate of consumer spending growth.
With cheaper gas prices, consumers have more money to spend, which likely helped sentiment climb.
This is the most optimistic consumers have been about personal financial expectations since 2007.
Consumer confidence is a key measure of the economies future. Consumers in the United States account for two-thirds of spending.
Keep in mind this is only one report and it only speaks to a consumers willingness to spend and not their ability to spend more money. Wage growth in the United States has been stagnant in recent years, leaving more cause for concern that consumers are not earning enough money to help grown the economy in the long-term.