The numbers: Americans grew more worried in early October about a resurgence in the coronavirus and slower hiring, but optimism that the economy will get better next year pushed consumer sentiment to a pandemic high.
The preliminary reading of consumer sentiment index edged up to 81.2 this month from a revised 80.4 in September, the University of Michigan said Friday.
What happened: An index that measures current conditions slipped to 84.9 from 87.8, indicating Americans are paying close attention to the increase in COVID-19 infections. The outbreaks appear worst in the Midwest, and if cases keep rising, it could lead to more government restrictions.
Yet consumers still think the situation will improve by early next year. An index that measures expectations for the next six months rose to 78.5 from 75.6.
A separate question about about who would win the presidential election showed that Democratic challenger Joe Biden expanded his advantage to 7 points in October from just 1 point in July and September. The gap expanded owing to more enthusiasm among Democrats and less among Republicans.
Independent voters, however, favored President Trump by 2 or 3 points, the survey showed.
“Most elections are decided by those who are non-aligned with either party,” noted Richard Curtin, the chief economist at the group that produces the sentiment survey.
The big picture: Higher confidence has long been associated with stronger economic growth and faster hiring. The slight increase in early October is a good sign, but it also includes several warning flags.
What will determine if the U.S. maintains its momentum will depend on whether the spread of the virus is kept under control and whether Congress passes another major stimulus package.
Market reaction: The Dow Jones Industrial Average
and S&P 500
rose in Friday trades. Stocks fell on Thursday after U.S. jobless claims increased and investors grew worried about a rising number of coronavirus cases around the world.