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U.S. Confidence Weakens in October, Expectations Sour

Oct 30, 2013 10:13 AM   By Jeff Miller
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RAPAPORT... U.S. consumer confidence in October 2013 fell slightly compared with one year ago.  The Conference Board Consumer Confidence Index® registered 71.2 points (1985=100) compared with 72.2 points in October 2012. However, the Conference Board noted that October's reading was sharply lower than September's index, which registered 80.2 points.

In October, the Present Situation Index surged 25.8 percent year on year to 70.7 points; however, the Expectations Index plunged 13.8 percent to  71.5 points.

U.S. consumer confidence is the most widely followed measure in predicting short- and long-term consumer spending trends, unlike other data that is taken well after the fact, such as the gross domestic product (GDP).

Lynn Franco, the director of economic indicators at The Conference Board, confirmed --as Gallup and other surveys have earlier this month-- that the federal government shutdown and debt-ceiling crisis took a toll on consumers’ mood and economic outlook. ''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 and 1996. However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months,'' she said.

Compared with one year ago, consumers' appraisal of the job market in October was only slightly better with 11.3 percent saying jobs were “plentiful,” compared with 10.3 percent in October 2012, while those saying jobs were “hard to get” was 35.8 percent, compared with 33.1 percent in October 2012. Those anticipating more jobs in the months ahead decreased to 15.3 percent from 19.2 percent one year ago,  while those anticipating fewer jobs rose to 22.7 percent from 20.3 percent, according to The Conference Board. Only 15.8 percent of consumers expect an increase in their incomes now, down from 16.7 percent one year ago.

 

Tags: conference board, consumer confidence, Consumer Spending, Jeff Miller, job market, outlook
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