By Agnel Philip
October 27, 2017, 9:00 AM CDT Updated on October 27, 2017, 9:23 AM CDT
Consumer sentiment climbed in October to the highest level since the start of 2004 as households grew upbeat about the outlook for the U.S. economy, a University of Michigan survey showed Friday.
HIGHLIGHTS OF MICHIGAN SENTIMENT (OCTOBER, FINAL)
Sentiment index rose to 100.7 (matching est.) from 95.1 in Sept.; preliminary reading for Oct. was 101.1
Current conditions gauge, which measures Americans’ perceptions of their finances, advanced to 116.5 from 111.7; reading is strongest since November 2000
Expectations measure rose to 90.5, the highest since January 2015, from 84.4
Gains in incomes, higher property values and stocks at a record kept sentiment about personal finances near an all-time high. More than half of all respondents in the survey said they anticipated the good times would persist in the coming year and expected the economic expansion would endure over the next five.
Improved finances were reported by 53 percent of all consumers this month, the biggest share since early 2000. Even more compelling was the fact that the recent gain was spread across age and income groups.
The pickup in confidence was accompanied by an increase in spending plans. Buying conditions for household durables were the most favorable since 2006 and largely due to gains among low- and middle-income consumers.
The economy, which expanded at a faster-than-forecast 3 percent pace in the third quarter, continues to recover from recent hurricanes with rebuilding efforts providing a boost after the initial hit. Jobless claims have fallen below their pre-storm levels, and new-home sales unexpectedly rose in September due to increased activity in the South, according to government figures released this week.
The sustained strength of consumer sentiment could be challenged if President Donald Trump and congressional Republicans fail to pass a tax cut.