The Zhitong Finance App learned that consumer confidence in the US unexpectedly rebounded in October, the first increase in four months, mainly due to improved consumer views on the job market and business environment. However, despite a rebound in consumer confidence, continued high prices and rising borrowing costs are still putting pressure on American households.
According to data released by the World Federation of Large Enterprises on Tuesday, the US consumer confidence index rose 7.5 points to 91.7 in October, the highest level since June this year, far exceeding the 81 expected by economists surveyed by the media.
According to disaggregated data, the index of consumer expectations for the next six months rose by nearly 7 points to 72.6 in October, while the current state of affairs index, which measures the current state of the economy, rose to a six-month high, indicating that American consumers' views on the current and future economic environment have improved.
Fergus McCormick, a senior economist at the World Federation of Large Businesses, said in a statement that the recovery in consumer confidence is in line with the downward trend in retail gasoline prices between September and October.
However, at the same time, he pointed out that despite an improvement in consumer confidence in October, the overall level is still in the midst of a long-term downward trend that has continued over the past few years.
According to the survey, the proportion of American consumers who think the current business environment is good exceeds the proportion who think the business environment is poor. At the same time, the proportion of respondents who think they have sufficient employment opportunities rose to a six-month high, reflecting an improvement in consumers' views on the labor market.
However, a rebound in consumer confidence does not mean that the economic pressure on American households has subsided. Continued rising prices are still eroding household purchasing power, and the fact that wage growth lags behind inflation also makes consumers worried. At the same time, recent borrowing costs have risen further, making it more expensive to buy homes, cars, and other high-value goods.
As the US midterm elections are to be held in a week, affordability of living is still a key issue affecting voters' economic evaluations and voting choices.
Furthermore, although the scale of layoffs in US companies is still relatively limited, there are not enough new jobs, and the labor market prospects are uncertain. Continued inflationary pressure is likely to further exacerbate consumer concerns about employment and income prospects.
Notably, the relationship between consumer confidence and actual consumer spending has not been very close in recent years. Although American consumers' evaluations of the economic outlook continue to be pressured, actual personal consumption spending has shown strong resilience and continues to be an important driving force supporting US economic growth.
Overall, the consumer confidence index for October greatly exceeded market expectations, indicating that American consumers' pessimism about the job market and business environment has abated. However, it remains to be seen whether this rebound will continue in a context where price pressure has not clearly subsided and financing costs continue to be high. Whether consumer spending can remain resilient in the future and whether the job market improves further will be an important factor in judging America's economic growth prospects.