Last Update: 17-Oct-14 10:11 ET
- The University of Michigan Consumer Sentiment Index increased to 86.4 in the preliminary reading for October from 84.6 in September. The Briefing.com consensus expected the Consumer Sentiment Index to fall to 84.0.
- Sentiment levels are at their highest point since July 2007.
- Over the past couple of weeks, severe volatility in the equity market resulted in a sharp drop in stock market prices. The effect on the consumer, however, was negligible. Improvements in the labor market, which featured the lowest initial claims reading in 14 years, and a general downward trend in gasoline prices kept sentiment levels moving higher.
- The Current Conditions Index was unchanged at 98.9 in the preliminary October reading. The Expectations Index increased to 78.4 from 75.4, which is the highest level since October 2012.
- The improvement in sentiment will likely have very little bearing on consumption trends. Consumption growth relies on income growth, and as long as income gains continue to strengthen, consumption should follow.
- Consumer sentiment has little influence on consumption. As long as payroll levels continue to expand, the resulting income growth should keep consumption gains steady regardless of the monthly ebbs and flows in sentiment.