The most recent consumer sentiment index compiled by the University of Michigan and Thomson Reuters shows Americans' confidence about economic prospects were higher in October than they have been in five years. The index rose to 82.6 for October, up 5.5% from September's mark and up 36% from last October's reading of 60.8, according to information released today.

However, the numbers aren't straight good news. The study's authors noted, among other things, that:

  • Equal numbers reported continued financial declines as reported that their financial situation had improved.
  • As many consumers anticipated improved economic conditions as expected continued problems in the national economy.

"The surge in consumer optimism may be largely due to the implied election promises of both candidates that most of the Bush tax cuts and the payroll tax cuts will be promptly extended," wrote Richard Curtin, chief economist of the Surveys of Consumers.

Gas prices have been on the decline, matching a rebound in the housing market that has sent the economy higher. GDP grew 2% last quarter according to a report released earlier today. Declining unemployment may have also boosted consumer optimism.

Today's consumer sentiment number actually fell slightly below  economist predictions of a reading of 83.