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Consumer confidence soars to highest level since 2004

  • Consumer confidence crushed expectations in October.
  • The consumer sentiment index reached its highest level since 2004.
  • The key economic indicator measures 500 consumers' attitudes on future economic prospects.
People carrying shopping bags walk along Fifth Avenue in New York.
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People carrying shopping bags walk along Fifth Avenue in New York.

Consumer confidence crushed expectations in October, flying by a seven-month high hit in August.

The consumer sentiment index, a survey of consumers by The University of Michigan, rose to 101.1 in October, far ahead of the 95 economists polled by Reuters anticipated.

"Consumer sentiment surged in early October, reaching its highest level since the start of 2004," Richard Curtin, chief economist for the Surveys of Consumers, said in a statement.

In September, the key economic indicator slipped to 95.3, after hitting peak levels in August.

Curtin noted that current trends indicated consumer spending continuing to expand through the middle of next year. He says, if that pace continues, it would mark the second longest expansion period since the mid-1800s.

The economist says October's numbers reflect "an unmistakable sense among consumers that economic prospects are now about as good as could be expected."

The index measures 500 consumers' attitudes on future economic prospects, in areas such as personal finances, inflation, unemployment, government policies and interest rates.