Consumer confidence is at a seven-year high.
The Conference Board Consumer Confidence Index rebounded from September to stand at 94.5, beating estimates. Economists forecasted consumer confidence to hit 87 in October.
In September, the Index stood at 89.
Sentiment has improved amid job gains and cheap gasoline prices, both of which can help increase consumers' purchasing power that can lead to economic growth. The U.S. created 248,000 jobs in September and the unemployment rate dropped to 5.9 percent as the labor force participation rate fell to 62.7 percent.
The monthly Consumer Confidence Survey follows what consumers buy and watch. It is conducted by Nielsen for The Conference Board.
"Consumer confidence, which had declined in September, rebounded in October. A more favorable assessment of the current job market and business conditions contributed to the improvement in consumers' view of the present situation," said Lynn Franco, Director of Economic Indicators at The Conference Board.
Consumers' optimism also improved in October with 19.6 percent of consumers expecting business conditions to improve in the next six month—an increase from 19 percent last month. But consumers' view of business conditions were mixed.
"With the holiday season around the corner, this boost in confidence should be a welcome sign for retailers," Franco said.
Outlook on the labor market also exceeded September data: consumers anticipating more jobs in the coming months rose 0.8 percent to 16.8 percent in October. Those expecting fewer jobs fell from 16.9 last month to 13.9 percent in October.
—AP contributed to this report.