New York -- Consumer confidence fell sharply in October, according to The Conference Board, whose monthly consumer confidence measure dropped to 71.2 in October, down from 80.2 in September. Economists had expected a reading of 75.0 in October.
The Present Situation Index decreased to 70.7 from 73.5.The Expectations Index fell to 71.5 from 84.7 last month.
“Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers’ expectations,” said Lynn Franco, director of economic indicators at The Conference Board. “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. 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. Those claiming business conditions are “good” decreased to 19.0% from 20.7%, however, those claiming business conditions are “bad” edged down to 23% from 23.9%.
Consumers’ appraisal of the job market was less favorable than last month. Those saying jobs are “plentiful” was virtually unchanged at 11.3% from 11.4%, while those saying jobs are “hard to get” increased to 35.8% from 33.6 %.
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% from 20.6%, while those expecting business conditions to worsen increased to 17.5% from 10.3%.