(Bloomberg) — Americans’ expectations for the economy in October climbed to the highest level in almost two years as a pickup in hiring, falling gasoline prices, and low borrowing costs heartened households.
A measure tracking the economic outlook climbed to 51 this month, the strongest since November 2012, from 41.5 in September, data from the Bloomberg Consumer Comfort Index showed today. The weekly sentiment index was little changed at 36.2 for the period ended Oct. 12 from 36.8.
The lowest jobless rate since 2008 and the cheapest gasoline costs in a year probably combined to lift households’ spirits about the future. The upbeat mood may be difficult to sustain as stocks slump and concern grows that the Ebola virus poses a wider health risk.
The “likeliest suspects” for the jump in expectations were the increase in hiring and the drop in gasoline prices, Gary Langer, president of Langer Research Associates LLC in New York, which complies the comfort index for Bloomberg, said in a statement. “Still the stock market last week sustained its largest one-week decline in more than two years.”
The 9.5-point jump in the expectations index was the biggest since May 2009, the month before the last recession ended. The share this month of those who said the economy was improving rose to 32 from 20, while the share who said the economy was getting worse fell to 30 from 38 in September.
The improving outlook this month was paced by gains among young, upper-income and single Americans. Those living in the Northeast and Democrats also registered gains.
The weekly measure of views on the current state of the economy was little changed at 25.7 compared with 25.6 the prior period. The buying climate index fell to 33 from 33.8 as more people said now was a poor time to make purchases.
The Bloomberg gauge of personal finances index dropped to 50, its lowest since late May, from 51 in the previous period.
Cheaper fuel is probably giving consumers hope that their finances will improve. A gallon of regular fuel at the pump cost $3.18 on average as of Oct. 14, down from a high of $3.70 in April, based on data from AAA, the largest U.S. motoring group.
Further gains in the job market could encourage consumers to spend. The unemployment rate declined to 5.9 percent in September and employers added 248,000 workers to payrolls, the Labor Department reported earlier this month.
Among other reports today, industrial production jumped in September by the most November 2012, driven by a surge at utilities and a rebound in manufacturing. The 1 percent advance in output at factories, mines and utilities exceeded the highest forecast in a Bloomberg survey and followed a 0.2 percent drop the prior month, Federal Reserve figures showed today in Washington.