US Consumer Confidence Soars: 6-Month High Fueled by Interest Rate Cut

A supermarket in New York, USA
[AFP 연합뉴스 자료사진. 재판매 및 DB 금지]

▶ In October, the University of Michigan consumer sentiment index rose for three consecutive months.

As the so-called ‘no-landing’ outlook for the US economy continues to grow while lowering inflation to the target level is gaining strength, the economic sentiment of US consumers appears to be improving.

The University of Michigan announced on the 25th (local time) that the October consumer sentiment index, which reflects consumers’ confidence in the U.S. economy, was 70.5, the highest level in six months since last April.

The University of Michigan Consumer Sentiment Index has been on the rise for three consecutive months since last August.

The gradual improvement in purchasing conditions for durable goods that require loans or installment financing in the aftermath of interest rate cuts contributed to improving consumer sentiment.

“The proportion of consumers who cite high interest rates as a negative factor when purchasing housing, durable goods, or vehicles has decreased,” said Joanne Shu, director of the Consumer Sentiment Index compilation at the University of Michigan.

The survey results showing that consumer sentiment has improved are consistent with other surveys and economic indicators on the U.S. economic situation.

September retail sales in the United States announced on the 17th were $714.4 billion, up 0.4% from the previous month and exceeding expert forecasts.

Wall Street has predicted that private consumption will slow down due to prolonged high interest rates, slowing wage growth, and the depletion of households’ excess savings.

In the October Economic Trends Report (Beige Book) released on the 23rd, the U.S. Federal Reserve (Fed) diagnosed that a slowdown in economic activity was not detected in the 12 regions in the U.S. covered by the Federal Reserve.

Contrary to the concerns of some in the market that employment conditions in the United States may quickly weaken, this suggests that the U.S. economy may continue to grow.