American consumer confidence rose surprisingly in October, as fears over the Delta variant of COVID-19 appear to have abated.
The US Conference Board said its consumer confidence index rose to a reading of 113.8 in October, up from 109.8 in September and the first gain following three straight months of declines.
Economists were expecting consumer sentiment to dip to 108.
Consumer confidence improved
"Consumer confidence improved in October, reversing a three-month downward trend as concerns about the spread of the Delta variant eased," the Conference Board's senior director of Economic Indicators Lynn Franco said in a press release.
"While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted," Franco added.
The Conference Board said that the proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October, a sign that consumer spending will continue to support economic growth into the final months of the year.
Nearly half of respondents said they intend to take a vacation within the next six months, the highest level since February 2020, a reflection of the on-going resurgence in consumers’ willingness to travel and spend on in-person services.
"While intentions do not always lead actual spending patterns, at face value, consumer goods demand appears to remain robust," Wells Fargo economists Tim Quinlan, Shannon Seery and Sara Cotsakis wrote in a research note.
"Buying intentions suggest consumers are willing to spend despite rising inflation or perhaps because of it. Consumer average inflation expectations over the next 12 months rose to a 13-year-high last month. So the possibility that consumers are fearful that prices will be even higher in the future, may be pulling some future demand forward," the Wells Fargo economists wrote.
Earlier on Tuesday, toy and media company Hasbro said it was working hard to ensure its products were on the shelves for the key Holiday shopping season.
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