US consumer confidence falls for third month in October
US consumer confidence dropped in October, with the Conference Board’s index falling to 102.6 from a revised 104.3 in September.
The present situation index, reflecting current business and labour market conditions, decreased to 143.1 from 146.2, while the expectations Index, indicating short-term outlook for income, business, and labour market conditions, fell slightly to 75.6 from 76.4.
That put the expectations index below 80, historically signalling a potential recession within a year.
Consumer concerns about an impending recession were indeed persisting, aligning with expectations of a mild economic contraction in the first half of 2024.
In October, consumers’ assessment of current business conditions became more pessimistic.
While 19.1% considered business conditions “good”, down from 21.0% in September), 18.3% viewed them as “bad”, up from 15.9%.
The labour market assessment remained stable, with 39.4% perceiving jobs as “plentiful”, slightly down from 39.7% in September, and 13.1% finding jobs “hard to get”, down from 14.2%.
Regarding the short-term outlook, consumers were more pessimistic about business conditions, with 20.2% expecting deterioration, up from 18.7%, while 16.5% anticipated improvement, up from 15.3%.
Assessments of the labour market outlook were slightly less favourable, as 16.0% expected more jobs, down from 16.2%, and 19.0% anticipated fewer jobs, up slightly from 18.9%.
Short-term income prospects also declined, with 15.6% expecting income increases, down from 17.9%, and 13.0% expecting decreases, down from 14.1%.
Consumer confidence in a family’s current financial situation improved slightly in October, although expectations for the family’s financial situation six months ahead softened.
Dana Peterson, chief economist at the Conference Board, noted that consumer confidence had now declined for three consecutive months.
“October’s retreat reflected pullbacks in both the present situation and expectations index,” Peterson said.
“Write-in responses showed that consumers continued to be preoccupied with rising prices in general and for grocery and gasoline prices in particular.
“Consumers also expressed concerns about the political situation and higher interest rates. Worries around war/conflicts also rose amid the recent turmoil in the Middle East.
“The decline in consumer confidence was evident across householders aged 35 and up, and not limited to any one income group.”
Reporting by Josh White for Sharecast.com.