U.S. Consumer Sentiment Improves More Than Initially Estimated In October

(RTTNews) - Consumer sentiment in the U.S. improved by more than previously estimated in the month of October, according to a report released by Thomson Reuters and the University of Michigan on Friday.

The report said the final reading on the consumer sentiment index for October came in at 86.9 compared to the mid-month reading of 86.4. Economists had expected the index to be unrevised.

With the unexpected upward revision, the index rose from the final September reading of 84.6 to reach its highest level since July of 2007.

"The gains in confidence over the past three months point toward improved holiday spending by consumers," survey director Richard Curtin said, according to Reuters.

He added, "Overall, five years after the start of the recovery, consumers have finally begun to adopt the expectations and behaviors that have driven past expansions."

The report showed that the survey's gauge of consumer expectations in October was upwardly revised to 79.6 from 78.4, coming in well above the September reading of 75.4.

Meanwhile, the survey's barometer of current economic conditions in October was downwardly revised to 98.3 from 98.9. The preliminary reading was unchanged from the previous month.

The survey's one-year inflation expectation fell to 2.9 percent in October from 3.0 percent in September, with the five-to-ten-year inflation outlook held steady at 2.8 percent.

On Tuesday, the Conference Board released a separate report showing a notable improvement in consumer confidence in the month of October.

The Conference Board said its consumer confidence index climbed to 94.5 in October from an upwardly revised 89.0 in September. Economists had expected the index to edge up to 87.0 from the 86.0 originally reported for the previous month.

With the increase, the consumer confidence index more than offset the drop seen in the previous month to reach its highest level since October of 2007.

Lynn Franco, Director of Economic Indicators at the Conference Board, said, "With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers."