Oct. 13 (UPI) — Consumers’ confidence in the U.S. economy has surged this month to its highest level in 13 years, researchers said Friday.
Richard Curtin, chief economist for the University of Michigan’s monthly Survey of Consumers, said the rate, which increased more than 6 percent from September, is a reflection by consumers that the economy is performing about as well as can be expected.
“While the early October surge indicates greater optimism about the future course of the economy, it also reflects an unmistakable sense among consumers that economic prospects are now about as good as could be expected,” Curtin said.
Consumer sentiment runs higher than consumer expectations, a reflection of the fact people have come to terms with the idea their own personal finances – wages, investments, personal savings – will not increase substantially in the near future.
“This ‘as good as it gets’ outlook is supported by a moderation in the expected pace of growth in both personal finances and the overall economy, accompanied by a growing sense that, even with this moderation, it would still mean the continuation of good economic times,” Curtin said.
Stronger consumer confidence can lead to increased economic activity in some sectors of the economy — particularly retail, home improvement and travel, as Americans become more likely to invest in items that could be seen in leaner times as luxuries, like a remodeled room in their home or a vacation.
Other economists said the underpinning for the rosy outlook comes from sustained job growth and the stock market’s bull run.
“Confidence continues to be supported by the soaring stock market and conditions in the labor market which, looking through the disruption caused by the hurricanes in September, still look very strong,” said Andrew Hunter, U.S. economist at Capital Economics, in a note to clients.
