(Bloomberg) -- Sentiment among US consumers increased in October to a six-month high as households grew more upbeat about buying conditions, partly because of cheaper financing costs.
The final October sentiment index rose to 70.5 from 70.1 a month earlier, according to the University of Michigan. The preliminary reading was 68.9.
Consumers expect prices will climb at an annual rate of 2.7% over the next year, unchanged from the prior month, the data out Friday showed. They see costs rising 3% on average over the next five to 10 years, down from 3.1% in the prior month.
The university’s measure of buying conditions for durable goods picked up to a four-month high as more than half of consumers indicated they expect further interest-rate relief in the coming year. That suggests consumer spending will remain resilient and help underpin the economy.
Moreover, expectations about household incomes rose to the highest level since June and respondents were more upbeat about the labor market.
“The share of consumers spontaneously mentioning high interest rates as a negative factor for buying conditions for homes, durable goods, and vehicles all fell,” Joanne Hsu, director of the survey, said in a statement.
At the same time, lower-income consumers continue to anticipate less income growth than those who earn more, the report showed.
The US presidential election in less than two weeks is also affecting expectations. The survey showed sentiment among Republican and independent voters increased to the highest levels since April, while confidence fell slightly among Democrats.
Those results may reflect growing confidence among Republicans that former President Donald Trump will prevail. A smaller share of consumers surveyed expect Vice President Kamala Harris to win.
The current conditions gauge rose to a four-month high of 64.9, while a measure of expectations eased slightly.
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