US: Consumer sentiment surges in early October on jobs and income - Wells Fargo

The University of Michigan’s Consumer Sentiment Index rose 6.0 points in early October to 101.01. According to analysts from Wells Fargo,  the surge appears to be driven by increased optimism about employment and income prospects. 

Key Quotes: 

“Consumer Sentiment showed surprising strength in early October. The proportion of consumers stating the country will have continuous ‘good times’ rose by 8 percentage points, while the proportion that expects ‘bad’ times fell 6 points. The Consumer Sentiment Survey tends to focus more on financial questions and is likely being pulled higher by the roaring stock market.”

“The proportion of consumers expecting their income to rise over the next year jumped 3.4 points to 54.6 percent, while concerns about job security remained near cycle lows.”

“Inflation expectations for the next 12 months plunged to just 2.3 percent, which may raise a red flag at the Fed. The drop may simply reflect lower gasoline prices following the earlier hurricane-driven spike.”
 

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