Consumer Confidence Takes Step Back
The Conference Board, New York reported its Consumer Confidence Index fell in October after a modest September increase.
The Index fell to 97.6, down from 102.6 in September. The Present Situation Index decreased from 120.3 last month to 112.1 in October, while the Expectations Index edged down to 88.0 from 90.8 in September.
“Consumers were less positive in their assessment of present-day conditions, in particular the job market, and were moderately less optimistic about the short-term outlook,” said Lynn Franco, Director of Economic Indicators with The Conference Board. “Despite the decline, consumers still rate current conditions favorably, but they do not anticipate the economy strengthening much in the near-term.”
Consumers’ appraisal of current conditions was somewhat less positive in October. Those saying business conditions are “good” decreased from 28.1 percent to 26.5 percent, while those claiming business conditions are “bad” increased from 16.4 percent to 18.3 percent. Consumers were also less upbeat about the job market. Those stating jobs are “plentiful” decreased from 24.8 percent to 22.2 percent, while those claiming jobs are “hard to get” edged up to 25.8 percent from 24.9 percent.
Consumers’ optimism about the short-term outlook was more subdued in October. The percentage of consumers expecting business conditions to improve over the next six months was unchanged at 18.1 percent, while those expecting business conditions to worsen inched up to 10.6 percent from 10.4 percent.
Consumers’ outlook for the labor market was slightly less optimistic. Those anticipating more jobs in the months ahead declined moderately from 14.9 percent to 14.5 percent, while those anticipating fewer jobs increased from 15.9 percent to 16.9 percent. The proportion of consumers expecting their incomes to increase declined from 18.7 percent to 18.0 percent, while the proportion expecting a decline increased from 9.9 percent to 10.7 percent.
Even with the softer reading, said Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., consumer confidence remains elevated.
“Consumers’ plans to buy continued to support the case for robust consumer spending to start the fourth quarter of the year,” Vitner said. “Home purchase plans also rose, with 6.3 percent reporting that they are in the market for a home in the next six months.”
Vitner said consumer confidence remains on trend to further solidify through the end of the year. “This should be good news for retailers heading into the important holiday shopping season,” he said.
