The Conference Board said Tuesday that its consumer confidence index, a key bellwether of public opinion, dropped to 98.6 in October after a nine-year high of 104.1 in September. Americans’ impression of present-day situations also plunged from 127.9 to 120.6, while the expectations index declined from last month’s measure of 87.2 to 83.9.
“Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat,” said Lynn Franco, director of economic indicators at the Conference Board. “However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged. Overall, sentiment is that the economy will continue to expand in the near-term, but at a moderate pace.”
The monthly survey found that consumers describing business conditions as “good” declined from 27.7% to 26.2% and those saying calling them “bad” increased from 15.8% to 17.7%. In addition, the percentage of people expecting things to pick up over the next six months decreased from 17 percent to 16 percent, while 12.2% are expecting the situation to worsen, up from 10.8% in September.
Tuesday’s report also highlighted a slightly pessimistic view of the labor market. Those stating jobs are “plentiful” fell from 27.6% to 24.3% and the proportion expecting more job opportunities in the months ahead decreased from 15.7% to 13.1%. At the same time, the number of people expecting their incomes to increase was unchanged in October and less people are expecting pay cuts.