NEW YORK – Oct. 29, 2013 – The Consumer Confidence Index, which declined moderately in September, decreased sharply in October. The Index now stands at 71.2, a 9-point drop from 80.2 in September.
The Present Situation Index that gauges attitudes about current conditions decreased to 70.7 from 73.5. The Expectations Index that gauges attitudes about the economy six months in the future fell to 71.5 from 84.7.
“Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers’ expectations,” says Lynn Franco, director of economic indicators at The Conference Board. “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 says the primary cause of October’s drop has passed, but since the resolution is only temporary, “confidence is likely to remain volatile for the next several months.”
Consumers’ assessment of current conditions declined moderately. Those claiming business conditions are “good” decreased to 19 percent from 20.7 percent; however, those claiming business conditions are “bad” edged down to 23 percent from 23.9 percent.
Consumers’ appraisal of the job market was less favorable than last month. Those saying jobs are “plentiful” was virtually unchanged at 11.3 percent from 11.4 percent, while those saying jobs are “hard to get” increased to 35.8 percent from 33.6 percent.
Consumers’ expectations, which had softened in September, decreased sharply in October. Those expecting business conditions to improve over the next six months fell to 16 percent from 20.6 percent, while those expecting business conditions to worsen increased to 17.5 percent from 10.3 percent.
Consumers’ outlook for the labor market was also more pessimistic. Those anticipating more jobs in the months ahead decreased to 15.3 percent from 16.1 percent, while those anticipating fewer jobs increased to 22.7 percent from 19.1 percent.
The proportion of consumers expecting their incomes to increase rose to 15.8 percent from 15.1 percent; however, those expecting a decrease rose to 15.4 percent from 13.9 percent.
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 Oct. 17.
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