American consumers are showing a notable increase in confidence in the economy in the days leading up to Election Day, according to a business research group.

What the data shows

According to the latest data from the Conference Board on Tuesday, the consumer confidence index rose to 108.7 in October from 99.2 in September. The jump represents the most significant monthly increase since March 2021, beating analysts’ expectations, which had forecast a modest 99.3.

This comes as election day (November 5) is fast approaching in which vice president Kamala Harristhe Democratic nominee, will face the former president Donald Trumpthe GOP candidate.

The Consumer Confidence Index provides a boost to Americans’ perceptions of current economic conditions and their outlook for the next six months. Particularly telling is the jump in near-term expectations for income, business conditions and the labor market, which reached 89.1. This number is critical because a reading below 80 can signal an impending recession, according to the Conference Board.

Additionally, the share of consumers predicting a recession in the next year fell to its lowest level since mid-2022.

The council reported Tuesday that consumers’ view of current conditions rose 14.2 points to 138.

Meanwhile, the number of respondents who said they planned to buy a house or a car continued to rise.

Dana Peterson, chief economist at the Conference Board, noted the shift in outlook.

“Consumer assessments of current business conditions have turned positive,” Peterson said in a statement. “Views of current job availability have rebounded after several months of weakness, possibly reflecting better labor market data.”

What is happening in the labor market

Despite the Labor Department’s report of a decline in job openings to the lowest point since January 2021, which could signal that the labor market is losing some momentum, the labor market remains relatively robust. The US economy added 254,000 jobs in September, lowering the unemployment rate to 4.1% as openings remain well above pre-pandemic levels.

That’s because tepid July and August jobs numbers hurt Americans’ confidence, along with falling inflation.

What else helped build trust?

Economists also attribute the boost in confidence to the Federal Reserve’s recent decision to cut its benchmark interest rate by 50 basis points, double the usual amount. The move, the Fed’s first rate cut in more than four years, is aimed at stimulating the economy in light of a labor market that is gradually.

The Fed has signaled further rate cuts this year and anticipates more cuts in 2025 and 2026.

With consumer spending accounting for nearly 70% of US economic activity, this boost in consumer confidence could have significant economic implications. It remains to be seen whether this optimism will hold after the election, but for now, Americans seem to be looking to the future with increased confidence.

This article includes reporting from the Associated Press.