Americans’ attitudes improved in Aug. and Sept., only to retreat in Sept as inflation worries flared and short-term outlooks remained “dismal.”
BOSTON – The Conference Board Consumer Confidence Index decreased in October after back-to-back monthly gains. The Index now stands at 102.5, down from 107.8 in September.
The Present Situation Index – consumers’ assessment of current business and labor market conditions – declined sharply to 138.9 from 150.2 last month. The Expectations Index – based on consumers’ short-term future outlook for income, business and labor market conditions – declined to 78.1 from 79.5.
“The Present Situation Index fell sharply, suggesting economic growth slowed to start Q4,” says Lynn Franco, senior director of economic indicators at The Conference Board. She calls consumer expectations for the short-term “remained dismal,” and longer-term expectations are “still lingering below a reading of 80 – a level associated with recession.”
While inflation fears have seemed to recede since July, they bounced higher this month, perhaps due to a political season that serves up constant reminders. Franco says both gas and food prices served as main drivers.
“Vacation intentions cooled; however, intentions to purchase homes, automobiles and big-ticket appliances all rose,” Franco adds. “Looking ahead, inflationary pressures will continue to pose strong headwinds to consumer confidence and spending, which could result in a challenging holiday season for retailers. And, given inventories are already in place, if demand falls short, it may result in steep discounting which would reduce retailers’ profit margins.”
- 17.5% of consumers said business conditions were “good,” down from 20.7%
- 24.0% said business conditions were “bad,” up from 20.9%
- 45.2% said jobs were “plentiful,” down from 49.2%
- 12.7% said jobs were “hard to get,” up from 11.1%
Expectations six months in the future
- 19.2% of consumers expect business conditions to improve, up from 18.6%
- However, 23.3% expect business conditions to worsen, up from 21.9%
- 19.8% expect more jobs to be available, up from 17.4%
- However, 20.8% anticipate fewer jobs, up from 17.8%
- 18.9% expect their incomes to increase, up from 18.3%
- However, 15.1% expect their incomes will decrease, up from 13.8%
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