Consumer Confidence Slips In October

Consumer Confidence Slips In October

Consumer confidence waned in October, reflecting somewhat less optimism about the jobs market and the U.S. economy in the next six months amid another outbreak of coronavirus cases.

The Conference Board Consumer Confidence Index declined slightly in October, after increasing sharply in September. The Index now stands at 100.9 (1985=100), down from 101.3 in September. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased from 98.9 to 104.6. However, its Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, decreased from 102.9 in September to 98.4 this month.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was October 16.

“Consumer confidence declined slightly in October, following a sharp improvement in September,” said Lynn Franco, senior director, economic indicators, The Conference Board. “Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs. There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high.”

Consumers’ assessment of current conditions improved further in October. The percentage of consumers claiming business conditions are “good” was virtually unchanged, from 17.6 percent to 17.5 percent, but those claiming business conditions are “bad” decreased from 37.0 percent to 33.9 percent. Consumers’ assessment of the labor market was more favorable. The percentage of consumers who said jobs are “plentiful” increased from 23.6 percent to 26.5 percent, while those claiming jobs are “hard to get” decreased slightly from 20.3 percent to 19.9 percent.

Consumers, however, are now less optimistic about the short-term outlook than a month ago. The percentage of consumers expecting business conditions will improve over the next six months decreased slightly from 36.7 percent to 36.3 percent, while those expecting business conditions would worsen increased from 15.8 percent to 17.0 percent. Consumers’ optimism regarding the job market was mixed. The proportion expecting more jobs in the months ahead increased slightly from 32.9 percent to 33.2 percent, but those anticipating fewer jobs also increased, from 16.1 percent to 20.2 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase improved from 17.3 percent to 18.4 percent, but the proportion expecting a decrease also increased, from 13.0 percent to 14.2 percent.