By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — Though down from a preliminary report, final consumer sentiment in October reached a five-year high amid brighter views on future and current conditions.
The final reading of the University of Michigan/Thomson Reuters consumer-sentiment index edged down to 82.6 — the highest final reading since September 2007 — from an initially reported 83.1.
Economists polled by MarketWatch had expected a final October level of 83, compared with 78.3 in September. See economic calendar.
While the U.S. economy still faces substantial headwinds, recent data show signs of an improving housing market and more jobs. However, the fiscal cliff remains a threat, said Richard Curtin, the survey’s chief economist.
“The very positive economic expectations of consumers stand in sharp contrast to growing concerns expressed by investors and companies about the impending fiscal cliff as well as the impact of a slowing global economy,” Curtin said. “The surge in consumer optimism may be largely due to the implied election promises of both candidates that most of the Bush tax cuts and the payroll tax cuts will be promptly extended.”
According to UMich, a gauge of consumer expectations rose to 79 in October from 73.5 in September. Meanwhile, a barometer of current conditions increased to 88.1 from 85.7.
U.S. stocks SPX -0.21% were slightly weaker after the sentiment data was released. Read Market Snapshot
Elsewhere Friday, the U.S. Department of Commerce reported that the economy picked up speed in the third quarter, with higher consumer spending, among other factors. Read more about GDP.
Steve Goldstein is MarketWatch's Washington bureau chief.
