Consumer Confidence Jumps to 91.7 as Gas Prices Ease in October

A surprise rebound, with caveats

October brought American consumers a break from months of worsening sentiment. The Conference Board's Consumer Confidence Index rose 7.5 points to 91.7, its highest reading since June. Economists had expected 81.0, and September's figure was revised up to 84.2 from 81.9.21 It was the first gain in four months, and it beat every forecast in Bloomberg's survey of economists.22 ZeroHedge counted it as the largest upside surprise since May 2025.28

The improvement showed up in every part of the survey. The Present Situation Index rose 8.6 points to 120.4, a six-month high. The Expectations Index gained 6.9 points to 72.6.21 Even so, the expectations gauge only partly made up for three straight monthly declines. It also remains below 80, a level the Conference Board has previously linked to a possible recession.21

The obvious reading is that consumers are feeling better. A closer look suggests something narrower: people felt some relief at the gas pump, and their frustration with high prices has not gone away.

Gasoline did most of the work

Almost every outlet linked the rebound to gasoline. Fergus McCormick, the Conference Board's senior economist for global indicators, said the recovery tracked the drop in retail gas prices from September to October. He also said confidence is still on the long-term downward trend of the past few years.2427 AAA's national average for regular gasoline was $4.27 a gallon on release day, down from $4.48 a month earlier. A year ago it was $3.05.23 CFO Dive, also citing AAA, put the price at $4.26, a 4.7% monthly drop that still leaves gas 28% more expensive than a year ago.27

That background matters. According to CFO Dive, sentiment measures from the University of Michigan and the New York Fed have been falling since February, when U.S. and Israeli air strikes on Iran cut crude supply and pushed fuel costs higher.27 Gasoline also drove the latest inflation numbers. Consumer prices rose 3.7% from a year earlier in September, faster than forecast, and core inflation picked up to 2.6% from 2.4% in August.27

Some analysts doubt the rebound will last. Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, said the mood among consumers remains bleak. He called the jump surprising given still-high gas prices, stalled stock gains and a weak labor market.27 BigGo Finance reported that markets are split on whether this is a turning point or a short-lived bounce. Some observers argue that a lasting recovery depends on prices and interest rates easing.23

Our view is that the skeptics have the stronger case. A gauge that rises mainly because gas prices fell will fall again if they climb.

Groceries remain the sore spot

The confidence survey and the official price data seem to disagree about food. In written comments to the Conference Board, consumers mentioned prices, the cost of food and groceries, and oil and diesel more often in October than before.21 Yet the official inflation figures for groceries look fairly calm.

USDA's Economic Research Service reports that food-at-home prices rose 1.8% in the year to September. All food was up 2.5%, while the overall CPI was up 3.7%.2 ABC News, using seasonally adjusted BLS figures, reported that grocery prices fell 0.1% in September, making groceries one of the better parts of the inflation report.5 The ERS figure, which is not seasonally adjusted, shows a 0.1% rise for the month.2 Both measures point to slow grocery inflation, not a new spike.

The gap between the data and how people feel has a few likely causes. One is that price levels, not just inflation rates, are what shoppers notice. A Cal Poly agribusiness professor told NPR that any new increase at the grocery store comes on top of prices that are already very high, which makes consumers especially sensitive.10 Another is that the averages hide big moves in individual items. NPR reported ground beef at $6.79 a pound, 85% higher than a decade ago, and coffee 44% higher than two years earlier. Butter, by contrast, was down 17.3% from a year ago.10 USDA expects beef and veal prices to rise 8.7% in 2026.2

Diesel also feeds into food costs. Analysts told ABC News that perishables such as produce and some meats are especially exposed to higher diesel prices because they spoil quickly.5 That gives a plausible link between the energy shock and the rising grocery complaints in the survey, even while the overall grocery index stays tame.

Shopping habits reflect the strain. In an Axonify survey of more than 1,200 U.S. and Canadian grocery shoppers, 67% said they were extremely or very concerned about grocery costs. Among the 88% who shop at more than one store in a typical month, 69% said they do it to find better prices.9

Retail sales: strong headline, weak underneath

A quick reading of the latest retail sales figures could make the confidence survey look too gloomy. September retail and food services sales rose 0.8% to $745.0 billion, according to the Census Bureau, and were up 6.3% from a year earlier.32 Economists had expected 0.3%, according to the AP.37

Most of that gain came from fuel prices. Gas station sales rose 6.4% in the month, accounting for $4.1 billion of the $5.7 billion increase. Without gas, sales grew only 0.2%.35 The figures are not adjusted for inflation, so higher pump prices count as more sales even when drivers buy the same amount of fuel.35 CNBC reported that sales excluding autos and gas rose about 0.25%, down from roughly 1.1% the month before. It described that slowdown as a sign that fuel costs are making households cut back elsewhere.33 The control group, which feeds into GDP estimates, rose just 0.1%.36

Grocery stores grew 0.9% from a year earlier, the slowest of any category that grew. Restaurants and bars were up 7.0%.35 Spending at grocery stores is not keeping pace with overall sales, while people continue to eat out. That fits the Conference Board's spending-plan data, where restaurants, bars and take-out remain the top planned service expense.21

Analysts disagree on how much the confidence surveys matter for actual spending. Ben Ayers of Nationwide pointed to a supportive labor market and said households have kept buying at a solid pace even as surveys stayed weak.25 Bloomberg's coverage, as republished, noted that sentiment has been a poor predictor of personal spending.29 Both points are reasonable. Still, the September data show that much of the spending strength is higher fuel bills, not consumers choosing to buy more.

Streaming bills keep climbing

Subscriptions are another cost that rarely features in these discussions. The Conference Board's list of top five planned service expenses includes streaming, internet and mobile services.21 Streaming services have raised prices repeatedly this year.

Disney+ and Hulu raised their ad-free plans by $2.50 to $21.49 a month. Existing subscribers start paying the new price on bills from October 21, so the increase arrives just as other costs are under scrutiny.20 Netflix raised all three of its tiers in March, with Premium now $26.99. Peacock's increases reached existing customers from mid-September.1720 One tracker estimates that a household paying for Netflix, Spotify, YouTube Premium, Disney+ and Peacock has gone from $73.95 to $83.45 a month this year.20 Another found that the ad-free plans of six major services now cost $108.94 a month combined, 76% more than in January 2022.11

Each increase is small. Together they make up a cost that keeps rising and gets less attention than gasoline or groceries. That helps explain why consumers can report improving business conditions while still expecting their purchasing power to shrink.

Planned spending is falling

The most telling part of the report may be what consumers say they will buy. They expect to spend less on services and durable goods over the next six months. McCormick attributed that to high prices and persistent inflation reducing purchasing power.24 Planned durable-goods purchases fell across the board, and intended purchases of electronics such as smartphones and laptops dropped by more than 1%. The share of consumers planning a vacation slipped to 43.3%.21 Average 12-month inflation expectations eased but stayed high at 5.8%.21

The gains were uneven. On a six-month moving average, only consumers under 35 and households earning $100,000 or more became more confident.21 The University of Michigan's sentiment index barely moved, at 48.0 in October versus 48.1 in September.24 Bloomberg's reporting described it as a five-month low.29 The two surveys are not contradictory. The Conference Board index puts more weight on the job market, while Michigan focuses on personal finances and the cost of living.29

What comes next

The timing gives the report political weight, with the November 3 midterm elections only days away and affordability a central issue for voters.2729 It also came as the Federal Reserve opened a two-day meeting under Chair Kevin Warsh.27

October's rebound is real, but it rests on one factor: a modest drop in gasoline prices. Grocery complaints are rising even though measured grocery inflation is mild, spending outside fuel barely grew in September, and subscription costs keep rising. October retail sales, due November 17, will show whether the improved mood turns into spending or whether confidence falls back once gas prices change direction.34