The stock market isn’t the only thing hitting new highs.
The University of Michigan consumer sentiment index just hit a 13-year high of 101.1 in October, far ahead of the 95 that economists had anticipated.
That’s the highest it’s been since 2004.
“Confidence continues to be supported by the soaring stock market and conditions in the labor market which, looking through the disruption caused by the hurricanes in September, still look very strong,” said Andrew Hunter, U.S. economist at Capital Economics, as quoted by The Wall Street Journal.
Richard Curtin, chief economist for the survey noted that October’s numbers reflect “an unmistakable sense among consumers that economic prospects are now about as good as could be expected,” said CNBC.
And it looks like the upswing will continue.
In fact, according to Curtin, current economic trends are indicating that consumer spending will continue to expand through the middle of 2018. “Indeed, nothing in the latest survey indicates that consumers anticipate an economic downturn anytime soon -- which contrarians may consider a clear warning sign of trouble ahead,” he says.
For an idea of how strong sentiment has become, we’re starting to see solid spending at U.S. retailers for example. In September 2017, sales at restaurants, retail stores, and online-shopping sites jumped a seasonally adjusted 1.6% from August 2017.
That was the largest one-month jump in more than two years.
Better still, retail sales are expected to pick up steam in the holiday season. In fact, analysts believe it could be one of the best on record, as million of Americans are now back to work, driving unemployment to a 16-year low of 4.2%.
That means consumers may have more cash to spend, as well as job security.
“The strong labor market and elevated consumer confidence should ensure that spending growth continues to rebound over the coming months,” noted economist Andrew Hunter at Capital Economics, as quoted by Market Watch.
The upswing in consumer spending and confidence is spurring growth in the economy, and that is helping The Cheap Investor find some great investment opportunities. In fact, we’re hard at work on the November 2017 issue right now.