US consumer sentiment improves in October

US consumer sentiment improved a little more than expected in October, according to a preliminary reading from the University of Michigan.

The Michigan consumer sentiment index rose to 59.8 from 58.6 in September, but was down from 71.7 in October 2021.

The current economic conditions index printed at 65.3 in October versus 59.7 the month before, and down from 77.7 a year earlier.

The index of consumer expectations fell to 56.2 in October from 58.0 in September and 67.9 in the same month a year ago.

Paul Ashworth, chief North America economist at Capital Economics, said the impact of lower gasoline prices and still-strong labour market conditions just about outweighed the drag from sharply lower stock markets.

He said that even with the improvement in the headline index, consumer confidence remains unusually low - on a par with the lowest points during the financial crisis in 2008 and well below the levels during the early stages of the pandemic.

"Although not a great guide to actual spending in recent years, the lack of confidence is consistent with outright declines in real consumption," he said. "Furthermore, with gasoline prices rising again now and stock markets hitting new lows, confidence could deteriorate even more in November."