Consumer Confidence Surges in October as Gas Prices Dip

American confidence in the economy rebounded in October as gas prices fell slightly.

The Conference Board reported Tuesday that its consumer confidence index climbed 7.5 points to 91.7 in October. This marked a recovery from 84.2 in September. The September reading stood as the lowest level in the survey history since April 2014. It also fell below the bottom recorded during the pandemic.

Gasoline prices contributed to the shift. According to AAA, the average price for a gallon of regular gas in the United States was $4.27 on Tuesday. That figure represented a drop from $4.48 a month prior. However, consumers still face higher costs compared to the previous year. The average price for a gallon of regular gas stood at $3.05 at this time last year.

Fergus McCormick, a senior economist at The Conference Board, linked the improvement to retail fuel trends. “The recovery was in line with retail gasoline prices easing from September to October,” McCormick said. He noted that the long-term downward trend in confidence persists despite the monthly gain.

Survey respondents expressed continued pessimism in write-in responses collected between October 1 and 21. Frequent mentions included the high cost of energy, goods, and services. The current situation index rose by 6.9 points to 72.6. The short-term outlook index climbed 8.6 points to 120.4.

The data arrives just days before the midterm elections on Tuesday. Inflation has remained a central issue for voters. The Labor Department reported that consumer prices rose 3.7% in September compared to the same period last year. This acceleration followed a 3.4% increase in August. Monthly costs jumped 0.6% from August to September, the largest gain in five months.

President Donald Trump has attributed high prices to his predecessor, Joe Biden. Inflation has risen since Trump's inauguration last year. The Federal Reserve raised its benchmark interest rate six weeks ago for the first time since 2023. The quarter-point increase lifted the key rate to approximately 3.9%. The central bank signaled that another rate hike could occur later this year. Few economists expect a change at this week's meeting.

The labor market data presented a mixed picture. The percentage of respondents describing jobs as “plentiful” rose to 26.7% in October from 24.3% in September. Those saying jobs were “hard to get” held steady at 21.4%. U.S. employers added 29,000 jobs last month, a figure below the 90,000 projected by economists. The unemployment rate increased to 4.2%. Average hourly wages rose 3% last month from a year earlier, the smallest annual gain since May 2021.