Concerns over business conditions and employment prospects took a bite out of consumer confidence in October.
The Conference Board’s closely-watched Consumer Confidence Index decreased marginally in October, following a decline in September. It now stands at 125.9, down from 126.3 in September and lower than the 128 reading economists had expected. The October metric was the lowest since June, when confidence fell to 124.3.
The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased from 170.6 to 172.3. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – declined from 96.8 last month to 94.9 this month.
“Consumer confidence was relatively flat in October, following a decrease in September,” said Lynn Franco, senior director of economic indicators at The Conference Board. “The present situation index improved, but expectations weakened slightly as consumers expressed some concerns about business conditions and job prospects. However, confidence levels remain high and there are no indications that consumers will curtail their holiday spending.”
The monthly Consumer Confidence Survey 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 18.
Consumers’ assessment of current conditions improved somewhat in October. Those claiming business conditions are “good” increased from 37.4% to 39.2% while those saying business conditions are “bad” decreased from 12.2% to 11.2%.
Consumers’ assessment of the job market was mixed. Those saying jobs are “plentiful” increased from 44.5% to 46.9%, while those claiming jobs are “hard to get” increased slightly from 11.0% to 11.8%.
Consumers were less optimistic about the short-term outlook in October. The percentage of consumers expecting business conditions will improve over the next six months decreased from 20.0% 18.6%, while those expecting business conditions will worsen decreased from 13.3%to 11.6%.
Consumers’ outlook for the labor market was also less upbeat. The proportion expecting more jobs in the months ahead decreased from 17.6% to 16.9%, while those anticipating fewer jobs increased from 15.4% to 17.8%.