Consumer Confidence Retreated More Than Forecast in October
Consumer confidence declined more than forecast in October, as households became less upbeat about the economy and labor market, figures from the New York-based Conference Board showed Oct. 25.
Key Points
• Confidence index decreased to a three-month low of 98.6 (forecast was 101.5) from a revised 103.5.
• Present conditions gauge fell to 120.6 from 127.9.
• Measure of consumer expectations for the next six months declined to 83.9 from 87.2.
• Share of those who said jobs were currently plentiful decreased to 24.3% from 27.6%.
Big Picture
Sentiment merely corrected after a recent run-up. Less optimism about the labor market coincides with a recent slowdown in hiring as companies adjust to a slower pace of demand from businesses and overseas customers.
The Conference Board’s figures also showed Americans have a more tempered view of business conditions. At the same time, households are still relatively upbeat about their income prospects, which will help keep consumer spending on a solid pace.
Economist Takeaways
“Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement. “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.”
The Details
• Consumers were less optimistic about the outlook for the labor market, as 13.1% said more jobs will be available in six months, the fewest since May.
• The labor differential, measuring the share of those saying jobs are plentiful minus the share saying they’re hard to get, was 2.2 percentage points, down from 5.3 points in September and the biggest monthly decline since 2012.
• The share of Americans who see their incomes increasing in the next six months held at 17.5%
• Sixteen percent of respondents said they saw an improvement in business conditions in the next six months, down from 17% and the lowest in three months.
• Buying plans declined for new cars, existing homes and appliances.
