University of Michigan consumer confidence index likely to have risen in October

The University of Michigan’s consumer confidence index rose in October by 5.6 points to a new cycle high of 100.7. The hard data are gradually catching up to the weaker sentiment data, but the gap still exists. The proportion of consumers stating the nation would have continuous “good times” rose by 8 percentage points, while the proportion that expects “bad” times dropped 6 points.

This survey tends to focus more on financial question and is likely being pulled higher by the roaring stock market, noted Wells Fargo in a research report. Inflation expectations for the next 12 months dropped to only 2.4 percent, which might raise a red flag at the Fed. The drop possibly reflects lower gasoline prices after the earlier hurricane driven spike.

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