University of Michigan consumer confidence index falls slightly to 100.7 in October

The University of Michigan consumer confidence index dropped in late October in spite of remaining at its highest monthly level since the beginning of 2004. The consumer sentiment index dropped to 100.7 in October from 101.1. It came in marginally below consensus expectations of 100.9.

The October print was reflected in more favorable consumers’ assessments of current economic conditions and expected economic prospects, which rose 4.8 and 6.1, respectively. Personal finances were judged near all-time favorable levels because of gains in household incomes and decade highs in home and stock values.

Lingering doubts about the near term strength of the national economy were dismissed as more than half of all respondents expected good times during the year ahead and expected the growth to continue uninterrupted in the next five years. Consumers do not expect accelerating growth rates but a continuation of the slower rate of growth that has characterized this rebound.

In all, the data shows that real consumption is likely to grow 2.6 percent in 2017 and in the first half of 2018.

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