After a hitting a seven-month low in September, U.S. consumer sentiment increased slightly in this month. The Conference Board's Consumer Confidence Index rose by 1.6 points to 50.2 in October. While that's better than last month's value, it's still quite low on a historical basis. The Present Situation Index was virtually flat, increasing to 23.9 from 23.3, and the Expectations Index rose slightly to 67.8 from 65.5. Do these results have any implications for next week's midterm elections?

First, here's a chart showing some history for the Confidence Index:

confidence 2010-10.png

So although confidence rose a bit, it remains at the second lowest value since February. You might notice that there's a lot of volatility in these month-to-month readings, so it might be useful to try to smooth out this chart with a 3-month average. Here's how that looks:

confidence avg 2010-10.png

This shows the trend much more clearly. Confidence has really been pretty stable for the past year, except for when it rose briefly in the spring. But in recent months it has fallen back to near 50. Essentially, the optimism about a strong recovery expressed earlier this year has been lost, as Americans now don't feel much better than they did a year ago.

Democrats facing midterm elections next week probably don't have much to celebrate regarding today's sentiment news. A steep rise might have meant that Americans were more upbeat about the economy going into the polls. But October's slight uptick isn't particularly meaningful. Instead, it's more likely that voters are generally very displeased with the direction of the economy, considering that average sentiment has fallen back to 2009 levels over the past few months.