The Conference Board Consumer Confidence Index, which declined “moderately” in September, decreased again in October, officials say.
The Index now stands at 71.2, down from 80.2 in September.
“This was the lowest index level since April’s 69.0 reading, essentially wiping out much of the gains this year,” Chad Moutray, chief economist at the National Association of Manufacturers, said in a recent blog post.
The Present Situation Index decreased to 70.7 from 73.5. The Expectations Index fell to 71.5 from 84.7 last month.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was October 17.
Lynn Franco, Director of Economic Indicators at The Conference Board, says consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers’ expectations.
“Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996,” Franco says. “However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months.”
Consumers’ assessment of current conditions declined moderately, according to the analysis.
Those claiming business conditions are “good” decreased to 19.0 percent from 20.7 percent, however, those claiming business conditions are “bad” edged down to 23.0 percent from 23.9 percent.
Meanwhile, consumers’ appraisal of the job market was less favorable than last month.
Those saying jobs are “plentiful” was virtually unchanged at 11.3 percent from 11.4 percent, while those saying jobs are “hard to get” increased to 35.8 percent from 33.6 percent.
And consumers’ expectations, which had softened in September, decreased sharply in October.
Those expecting business conditions to improve over the next six months fell to 16.0 percent from 20.6 percent, while those expecting business conditions to worsen increased to 17.5 percent from 10.3 percent.
Consumers’ outlook for the labor market was also more pessimistic.
Those anticipating more jobs in the months ahead decreased to 15.3 percent from 16.1 percent, while those anticipating fewer jobs increased to 22.7 percent from 19.1 percent. The proportion of consumers expecting their incomes to increase rose to 15.8 percent from 15.1 percent, however, those expecting a decrease rose to 15.4 percent from 13.9 percent.
“The importance of this data is the impact on buying intentions,” Moutray says in the aforementioned blog post. “Unfortunately, the percentage of respondents planning to purchase a home (down from 6.5 percent to 5.9 percent) or automobile (down from 12.9 percent to 11.8 percent) fell for the month.”
He adds, “However, the percentage of consumers planning to purchase an appliance rose from 48.8 percent to 50.4 percent, suggesting that not all elements were moving lower.”
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