Consumer Confidence Index Jumps to 91.7 as Grocery Costs Bite

A surprise rebound after a grim September

In October, American consumers sounded less gloomy than economists expected. The Conference Board's Consumer Confidence Index climbed 7.5 points to 91.7. September's reading was revised up to 84.2, and the October figure brought the index back to where it stood in June.1 It was the first increase in four months and the highest reading since June. The result also beat every forecast in Bloomberg's survey of economists.34

The forecasts themselves varied a little depending on who was surveyed. One market summary put the consensus at 81.0 and called October the largest beat since May 2025.2 Another report said economists had expected the index to slip to 80.4.8 Either way, the reading landed roughly ten points above what forecasters thought households would report.

The starting point matters. In September the index had dropped to its lowest level since 2014, after it also fell in July and August.3 October's gain therefore looks less like the start of a boom and more like a recovery from a very low base. The rest of the data supports that cautious reading.

What actually improved

The gain was broad. All five components of the index rose. The Present Situation Index gained 8.6 points to 120.4, a six-month high.2 The share of consumers calling jobs "plentiful" rose to 26.7% from 24.3%. The share saying jobs were "hard to get" stayed at 21.4%.3 Consumers also became less pessimistic about business conditions six months out. The share expecting conditions to worsen fell to 20.7% from 25.2%.1

The Conference Board tied the improvement to relief at the gas pump. Senior economist Fergus McCormick said the recovery matched the easing of retail gasoline prices from September to October.1 That link is important. Energy prices have been rising sharply this year. Brent crude recently reached $117 a barrel, compared with an average of about $70 before the US and Israel attacked Iran in February.34 A small drop in pump prices was enough to lift how people felt. That suggests sentiment is still closely tied to fuel prices, and a renewed price spike could reverse it just as fast.

The weaker spots stand out more. The Expectations Index rose 6.9 points to 72.6, but that only partly reversed three straight monthly declines.1 It is still below 80, a level the Conference Board has historically linked to recession risk. That said, the index has spent long stretches below 80 since the pandemic without a recession following.2 McCormick also said confidence is still on the long-term downward trend that has lasted for several years.8

Groceries are still the complaint that won't go away

When consumers wrote in their own concerns, prices came first. Mentions of prices, the high cost of food and groceries, and oil and diesel prices all increased in October.1 So the month in which confidence rose was also a month in which more people complained about grocery bills.

The official data partly explains why. In September, overall food prices were 2.5% higher than a year earlier, down slightly from 2.7% in August. Headline inflation reached 3.7%.31 The split inside the food category matters. Seasonally adjusted grocery prices fell 0.1% from August and were up 1.8% over the year, while restaurant prices rose 3.5%.35 Some staples are easing. Milk fell to about $4.11 a gallon. Others are not: ground beef averaged $6.79 a pound, and the USDA expects beef and veal prices to rise 9.4% in 2026.35 The USDA expects all food prices to rise about 2.9% this year. It sees fresh vegetables up 5.7%, sugar and sweets up 6.6%, and nonalcoholic beverages such as coffee up 4.2%.40

The longer view explains the frustration better than any single month. Since January 2021, food-at-home prices have risen 27.6% and ground beef has risen 71.3%.35 A slower pace of increases does not bring prices back down. Shoppers are comparing what they pay now with what they remember paying, not with last month's inflation rate.

Local reporting shows the same mixed picture. At Chanatry's Market, an independent grocer in Oneida County, New York, general manager Steve Brooks said prices are stabilizing. He said the store buys carefully so it can offer customers the best prices it can.9 Survey data points to shoppers working harder to save. In one survey, 67% said they were extremely or very concerned about grocery costs. Among shoppers who use more than one store in a month, 69% said they do it to find better prices.36 The UK is seeing a similar pattern, with shoppers relying more on promotions as grocery inflation picks up again.33

Retail sales: strong headline, weak underneath

The main argument for an optimistic reading is that Americans keep spending. Retail sales rose 0.8% in September to $745.0 billion, after a revised 1.3% gain in August. The September figure was up 6.3% from a year earlier.13 Economists had expected only 0.3%.16

Gasoline accounts for most of that gain. Gas station sales rose 6.4%. Without them, retail sales grew just 0.2%.16 Of the roughly $5.7 billion added in September, about $4.1 billion came from gas stations.19 Michael Pearce of Oxford Economics said the jump was almost entirely due to higher gasoline prices. He expects spending to lose momentum heading into the holidays as higher prices weigh on households.16 The Conference Board estimated that inflation-adjusted retail sales rose only 0.1% in September. The retail control group, which feeds directly into GDP, also rose just 0.1%.17

Grocery stores show how households are being squeezed. Food and beverage store sales grew only 0.9% from a year earlier, the slowest gain of any category that grew.19 When grocery sales grow that slowly while food prices are rising, it suggests households are buying less, switching to cheaper products, or both. BDO's Natalie Kotlyar said many shoppers are drawing on savings and promotions to stretch their budgets.16 Real incomes have fallen over the past six months, yet spending has held up.18 That combination cannot last indefinitely.

Subscriptions are a separate squeeze

The Conference Board survey hints at another pressure. Streaming, internet and mobile services were among consumers' top five planned spending categories, alongside restaurants, utilities, health care and personal care.1 Those services became much more expensive this year.

Eight major streaming services raised prices in 2026, making it one of the busiest years for streaming hikes on record.24 Netflix raised all three of its plans in March, putting its Standard tier at $19.99.22 Peacock Premium rose $2 to $12.99 in August.27 Disney+ and Hulu raised their ad-free plans to $21.49. Existing subscribers began paying the new price on bills dated on or after October 21.29 That means the latest increase arrived in the same month consumers reported feeling better. Since January 2022, Apple TV's price has tripled to $14.99 and Disney+ without ads has risen 169%.24 Discovery+ added its own increase after the Paramount–Warner Bros. merger.30

The cost adds up. One estimate found that a household with five common plans went from $73.95 a month at the start of 2026 to $83.45 now, or about $114 more per year.29 That amount alone won't break most budgets. But it comes on top of higher grocery and fuel costs. Because subscription charges renew automatically, they keep draining income even when people feel too stretched to make new purchases.

Why the rebound looks fragile

Analysts disagree about what the rebound means. Syracuse University professor Carl Schramm sees a rising index as a sign of continued growth, more spending, and potentially more purchases of home repairs, vehicles and appliances.9 The Conference Board's own data cuts against that. Plans to buy autos and homes edged down, and planned spending on durable goods fell across every category. Expected purchases of smartphones, computers and tablets dropped by more than 1%.1 McCormick attributed the pullback to high prices and persistent inflation reducing purchasing power.1 Vacation plans also slipped, to 43.3%.3

The gains were also uneven. On a six-month average, only consumers under 35 and households earning $100,000 or more became more confident.1 A separate University of Michigan sentiment index was revised up to 48 in October, but that was still slightly below September's 48.1.8

Monetary policy adds to the pressure. Consumers' 12-month inflation expectations eased but remained high at 5.8%.6 The Fed raised rates in September for the first time in three years and held steady in October. Some strategists expect another hike in December.6 Consumers themselves still expect interest rates to rise over the next year.1

Overall, October's jump in confidence looks like relief tied to cheaper gas, not a turning point. Households are buying more gasoline in dollar terms, buying less at the grocery store, cutting back plans for big purchases, and paying more for subscriptions they keep. The next readings will show whether the improvement holds: retail sales on November 17 and the Conference Board's next survey on November 24.133 If gas prices rise again before then, much of October's gain could disappear.