NEW YORK (CNN/Money) - A closely watched measure of consumer confidence in the United States rose in October, according to a published report Friday, beating Wall Street expectations.
The University of Michigan's preliminary consumer sentiment index for the month rose to 89.4 from 87.7 in September, according to market sources quoted by Reuters. Economists, on average, expected a reading of 88.2, according to Briefing.com.
October's reading was only slightly better than the August reading of 89.3. The index peaked in May, following a war-related slump in the spring, and has been rising and falling since.
The university's "current conditions" index, measuring consumers' feelings about the current state of the economy, rose to 102.2 from 98.4 in September, Reuters said. The "expectations" index, looking into the future, rose to 81.2 from 80.8, according to Reuters.
U.S. stock prices fell after the news, while Treasury bond prices rose.
Wall Street pays close attention to consumer spending, which makes up more than two-thirds of the total economy.
The economy has shown encouraging signs of strength lately, led by a surge in consumer spending that may have pushed third-quarter gross domestic product (GDP) growth to its fastest pace in four years.
But GDP growth will likely slow down again in the fourth quarter, and the labor market has shown few signs of full recovery. Some economists worry consumers will be reluctant to go on spending sprees if the job market doesn't show significant improvement.
Certainly, a lack of job growth has weighed on consumer sentiment, but consumers don't always spend the way they feel -- confidence hit rock-bottom immediately after the Sept. 11, 2001, terrorist attacks, but consumers still responded eagerly to sales incentives, most notably the zero-percent financing offered by automakers.
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