Consumer Confidence Climbs to 91.7 as Gold Hits Session High

Improving assessments of business conditions and easing gasoline prices helped lift U.S. consumer confidence in October, while gold prices reached an intraday high after the latest economic data was released Tuesday. The Conference Board reported an index reading of 91.7, exceeding economists' expectations and signaling a recovery in consumer sentiment.

The index increased from September's revised reading of 84.2, surpassing the 81 forecast by economists surveyed by The Wall Street Journal. Spot gold subsequently traded at $4,048.48 per ounce, up 0.78% on the day, according to Kitco News.

The Conference Board's Present Situation Index, which measures perceptions of current business and labor market conditions, rose 8.6 points to 120.4. Its Expectations Index, reflecting consumers' outlook for income, business activity and employment over the next six months, gained 6.9 points to 72.6, partially reversing three consecutive monthly declines.

The preliminary survey covered October 1 through October 21. Despite the monthly improvement, the Conference Board said overall confidence remained on a longer-term downward trajectory that has persisted for several years.

Fergus McCormick, Senior Economist, Global Indicators at The Conference Board, attributed the improvement primarily to stronger perceptions of current and future business conditions. He also connected the recovery to lower retail gasoline prices between September and October.

McCormick said consumers remained concerned about affordability, with persistent inflation and elevated prices continuing to erode purchasing power. Planned spending on services and durable goods over the following six months declined despite the overall improvement in confidence.

Written responses to the October survey showed increased references to expensive food, groceries, oil and diesel. Concerns about jobs and employment also edged higher, while mentions of war and conflict declined for a second consecutive month but remained elevated.

Consumer confidence varied across demographic groups. On a six-month moving average basis, confidence increased only among people younger than 35 and households earning at least $100,000 annually.

The Conference Board also reported a widening generational divide, with Gen X, Baby Boomers and the Silent Generation remaining significantly less confident than Gen Z and Millennials. Confidence improved across political affiliations in October, although the increase was substantially greater among Republicans.

Average consumer inflation expectations for the next 12 months fell but remained elevated at 5.8%, according to the Conference Board. Consumers continued to anticipate higher interest rates, while more respondents expected stock prices to rise than fall over the coming year.

Jeffrey Roach, Chief Economist at LPL Financial, said business conditions and discretionary spending improved during October. He also noted that employment opportunities appeared more plentiful and homebuying plans had increased for a third consecutive month.

Roach said, "Business conditions are the best since April when consensus believed the war with Iran would be short-lived, inflation was less sticky, and the AI-trade dominated headlines," highlighting the improvement in consumer assessments of the economy.

Spending intentions showed continued strength in selected discretionary categories. Roach identified restaurants and movies among the five leading spending plans, while consumers indicated they would reduce spending on hotels and airfare.

He said, "Consumers may be tightening their belts, but some experiences are still a priority," describing the contrast between continued demand for certain activities and restraint in other areas of household spending.

Roach also cited data on core capital shipments, auto sales and broader consumer spending in assessing the economic outlook. He projected that third-quarter economic growth would likely exceed 3%, potentially bringing full-year growth to 2.2%.