By Anneken Tappe, CNN Business
American consumers are feeling good again.
Supply chain problems and sky-high inflation have done little to shake consumer confidence as people plan to spend big bucks on big purchases like homes, cars and large appliances. And that’s a strong signal that consumer spending will continue over the Christmas period and into the end of the year.
The consumer confidence index rose to 113.8 points in October, beating economists’ expectations and reversing a three-month downtrend, according to the Conference Board that compiles the index. It was the highest level since July, when the index stood at 125.1 points.
Both consumer perceptions of current conditions and expectations for the future also rose, reversing the same three-month downtrend. Americans are mostly feeling better because their concerns about the more contagious Delta variant have subsided.
This was also reflected in people’s plans: Almost half of those surveyed in the consumer survey said they would like to go on vacation in the next six months, which is the highest proportion of people interested in traveling since the pandemic.
“As near-term inflation concerns rose to a 13-year high, the impact on confidence remained subdued,” said Lynn Franco, senior director of economic indicators for the Conference Board.
Consumer price inflation reached its 13-year high in June and July again last month. It is noteworthy, however, Americans seem a little unimpressed by the price hikes, especially as survey respondents say they expect prices to continue to rise.
American households are and can be in good shape absorb the higher costs at least for the time being. “And most of it is thanks to the job market,” said Jennifer Lee, senior economist at BMO. “And although the proportion of respondents who think there are a lot of jobs has decreased slightly this month, the proportion of those who think jobs are hard to get has decreased even more.”
With the labor market rebounding imminent, high inflation may linger for a while before prices get so high that people begin to reconsider larger purchases.
The next look at the country’s employment situation is due on Friday November 5th.
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