Consumer Confidence Plummets in October
NEW YORK-Reeling from the effects of the government shutdown and the debt-ceiling crisis, the consumer confidence index fell nine points in October to 71.2.
According to The Conference Board, which compiles the monthly indicator, both situations hurt on both the present-situation and expectation indexes, the two components of the overall number. The expectations index dropped 13.2 points to 71.5, while the present-situation index was down 2.8 points to 70.7.
Lynn Franco, the board's director of economic indicators, said both the shutdown and the debt-ceiling crisis "took a particularly large toll on consumers' expectations. 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." Franco added that, given the temporary nature of the resolution of both situations, consumer confidence "is likely to remain volatile for the next several months."
In the board's survey, which is conducted each month by Nielsen, a smaller percentage of consumers in October expected business conditions to improve over the next six months than in September, while a larger percentage expected business conditions to worsen. In addition, the ratio of consumers expecting more jobs in the next six months declined, while the percentage of those anticipating fewer jobs increased.
Also, the percentages of those claiming current business conditions are "good" and that jobs are "plentiful" fell from September. The percentage of consumers who see current business conditions as "bad" was down, while the percentage of those seeing the number of jobs as "plentiful" was virtually unchanged.