By Andrew Moran

U.S. consumer confidence rebounded sharply in October, logging its first increase in four months, according to The Conference Board.

This month’s Consumer Confidence Index rose by 7.5 points to 91.7, from an upwardly revised 84.2 in September.

It also marks a sizable reversal after falling last month to its lowest level since April 2014, a jump that also drew President Donald Trump’s attention.

Story continues below advertisement

“That’s a great number,” the president told reporters. “You don’t see that happen very often, not to that extent.”

Consumers’ improved assessments of current business and labor market conditions supported the increase.

A recovery in the short-term outlook for business, income, and employment also drove the bounce-back.

“Business conditions are the best since April when consensus believed the war with Iran would be short-lived, inflation was less sticky, and the AI-trade dominated headlines,” Jeffrey Roach, chief economist at LPL Financial, said in a note emailed to The Epoch Times.

But consumer confidence remains on a long-term downward trend, reflecting frustration over ongoing inflation pressures, says Fergus McCormick, senior economist at The Conference Board.

Based on write-in responses from the Oct. 1–Oct. 21 survey period, participants cited elevated prices and jobs as concerns.

“Consumers planned less spending on services and durable goods over the next six months. This likely reflected higher price levels and persistent inflation, which eroded consumers’ purchasing power,” McCormick said in a statement.

Looking ahead over the next year, consumers’ average 12-month inflation outlook was close to 6 percent. They also expect higher interest rates over the next 12 months.

Inflation has consistently weighed on consumer sentiment since the war in Iran began in late February.

The war-driven oil price shock has pushed headline annual inflation to 3.7 percent. Underlying inflation, however, has been more tepid, remaining below 3 percent.

The national average for a gallon of regular gasoline was almost $4.27 on Oct. 27, down more than 20 cents from a month ago, according to the American Automobile Association.

Diesel prices have also come down modestly by about 12 cents a gallon over the past month and remain, on average, at $6.35.

But prices for both gas and diesel are up firmly from a year ago.

PCE Inflation Outlook

The next snapshot of consumer inflation will be released on Oct. 28, when the Bureau of Economic Analysis publishes September’s Personal Consumption Expenditure (PCE) Price Index.

PCE inflation is the Federal Reserve’s go-to measure of prices because it is more comprehensive and the composition is updated more frequently.

The Cleveland Fed’s Inflation Nowcasting Model expects the 12-month PCE inflation rate to come in at 3.6 percent.

Excluding energy and food prices, the annual core PCE inflation rate is forecast to be 3.1 percent.

Last month, the Federal Reserve raised interest rates for the first time in more than three years to cushion the possible blows from second- or third-order inflation effects from higher global energy prices.

While policymakers fear rising oil costs will filter through the broader economy, Truflation economists say “energy remains the dominant impulse” in the current inflation story.

Federal Reserve Chairman Kevin Warsh testifies before the House Committee on Financial Services on Capitol Hill in Washington on July 14, 2026. Madalina Kilroy/The Epoch Times

“September inflation is still primarily supply-driven, with selective demand resilience rather than broader overheating,” Truflation economists said in an emailed note to The Epoch Times.

“Energy and tariffs remain the principal upside risks. The policy test is whether high costs spread persistently into core goods, services, and wages.”

The PCE data will be published one day after the U.S. central bank completes its October policy meeting.

Traders largely expect the Fed to keep the benchmark rate steady, betting that officials will follow through on another quarter-point rate hike in December.

Additional rate hikes can temper demand and limit second-round effects but fail to address the main challenge of boosting energy supply and reversing tariffs, Truflation added.

“Further action depends on whether the shock becomes embedded in core services, wages and inflation expectations,” the report stated.