Consumer confidence takes a hit in October

Consumer confidence experienced an October surprise of sorts after reaching a nine-year high in September.



The index now stands at 98.6, down from 103.5 last month.



“Consumer confidence retreated in October, after back-to-back monthly gains,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat. However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace.”



Meanwhile, the Present Situation Index decreased from 127.9 to 120.6. Those saying business conditions are “good” decreased moderately from 27.7% to 26.2%, while those saying business conditions are “bad” increased from 15.8% to 17.7%. As for the labor market, those stating jobs are “plentiful” decreased from 27.6% to 24.3%, while those claiming jobs are “hard to get” declined marginally from 22.3% to 22.1%.



The Expectations Index also declined from 87.2 to 83.9. The percentage of consumers expecting business conditions to improve over the next six months decreased from 17.0% to 16.0%, while those expecting business conditions to worsen increased from 10.8% to 12.2%. With labor, the proportion expecting more jobs in the months ahead decreased from 15.7% to 13.1%. However, those anticipating fewer jobs declined from 18.1% to 17.0%. The percentage of consumers expecting their incomes to increase was unchanged at 17.5%, while the proportion expecting a decline decreased from 10.4% to 9.8%.