Consumer confidence sours further
NEW YORK (Reuters) – Consumer confidence worsened in
October after staging a dramatic fall last month as hurricanes,
high gasoline prices and uncertainty over jobs continued to
weigh, a survey showed on Tuesday.
The Conference Board said its index of consumer sentiment
fell in October to 85.0 from a September reading of 87.5, which
was revised upward from 86.6. A Reuters poll of economists gave
a median forecast for a rise to 88.1
“Much of the recent decline in confidence over the past two
months can be attributed to the recent hurricanes, (gas) pump
shock and a weakening labor market,” said Lynn Franco, director
of the Conference Board Consumer Research Center.
The business research group’s present situation index fell
to 108.2 from an upwardly-revised 110.4, while the expectations
component dropped to 69.5 from an upwardly revised 72.3 in
Consumers’ view of the labor market darkened this month as
well, according to the Conference Board.
The survey’s “jobs hard to get” index edged up to 25.3 in
October, from 25.0 in September, making this the highest
reading since December 2004.
Sentiment indexes have traditionally been seen as a gauge
of consumer spending, which accounts for roughly two-thirds of
overall economic activity.
But the low interest rate environment of recent years has
seen sentiment and spending de-couple as consumers have
continued to buy new cars and houses in spite of their concern
over the economic outlook.