A significant increase in consumer sentiment
In October, consumer sentiment in the United States increased significantly, reaching its highest level in the last six months. This improvement was fueled by a more optimistic perception of purchase conditions, thanks also to more affordable financing costs. According to data released by the University of Michigan, the final October index rose to 70.5 points, compared to 70.1 the previous month, while the preliminary reading
was 68.9.
Inflation and spending forecasts
Consumers expect prices to rise at an annual rate of 2.7% over the next year, in line with the previous month. In addition, they expect inflation to average 3% over the next five to ten years, down slightly from 3.1% in September. This scenario suggests that consumers feel more secure about their spending capacity, which could further support the economy.
Purchase conditions and impact of elections
The indicator relating to purchasing conditions for durable goods has reached a four-month high, with more than half of consumers expecting further reductions in interest rates in the coming year. However, it’s important to note that low-income consumers continue to expect lower wage growth than those who earn more.
The upcoming presidential elections in the United States, scheduled in less than two weeks, are affecting expectations, with the current conditions indicator rising from its four-month high to 64.9 points, while the measure of expectations has fallen slightly to 74.1.