Consumers moods are picking up on lower gas prices and gains in the labor market, as consumer confidence rose to the highest level in over seven years in October: the Thomas Reuters/University of Michigan consumer confidence index rose to a reading of 86.4 – the strongest since July 2007.
Also on the upside, industrial production rose last month by the most since November 2012, driven by a surge in utility output (the strongest since May 2012).
Homebuilder confidence slipped from a nine-year high in October, with the National Association of Home Builders confidence gauge declining for the first time in five months. The gauge of prospective buyer traffic also dropped, as did a measure of the six-month outlook for sales.
In contrast to the decline in homebuilder confidence, work began on more homes in September, with housing starts climbing 6.3% to an annual pace of 1.02 million units. Permits for future building rose 1.05% to a 1.02 million unit annual pace.
On a downbeat note, retail sales fell .3% last month, marking the first decline in eight months. Weakness was broad, with sales falling for internet retailers, home improvement stores and apparel outlets.
The US is not the world’s economic powerhouse… China is – in Europe’s view. According to a Pew Research Center survey, perception has changed among America’s allies in Europe. Back in 2008, a median 44% consider the US to be the top economic power, while 29% said it was China. Today, 49% view China as the foremost economic power, while 34% would say the US.