NEW YORK – Confidence among U.S. consumers declined for a third consecutive month, to the lowest level since October 2005, according to a preliminary report today by The Conference Board.
The Consumer Confidence Index fell 3.9 points this month to 95.6 (1985 = 100 points) from September’s revised level of 99.5 points.
The decline was four times the 0.9 percent dip – to 99.0 points from the original September estimate of 99.8 – that was the median forecast from a Bloomberg News survey of 70 economists. (Their predictions for the index ranged from 95.0 to 102.0 points.)
The cutoff for today’s preliminary report was Oct. 23. The Consumer Confidence Index is based on a monthly survey of 5,000 households nationwide that is conducted for The Conference Board by TNS.
Confidence “continues to hover at two-year lows (October 2005, 85.2),” Lynn Franco, director of The Conference Board Consumer Research Center, wrote in the report. “Further weakening in business conditions has – yet again – tempered consumers’ assessment of current-day conditions and may very well be a prelude to lackluster job growth in the months ahead.
“In addition, consumers are growing more pessimistic about the short-term future, and their rather bleak outlook suggests a less than stellar ending to this year.”
The Expectations Index fell to 80.1 points this month from 85.0 the month before, as respondents’ outlook for the next six months continued to dim. The Present Situation Index, indicating consumers’ assessment of the current state of the economy and job market, fell to 118.8 points from 121.2 in September.
“Housing is clearly the root of the problem,” Carl Riccadonna, an economist in New York at Deutsche Bank Securities Inc., told Bloomberg News. “If consumer spending falls apart, the Fed will have much bigger problems to contend with.”
The Conference Board – a nonpartisan, nonprofit business membership and research organization whose U.S. offices are in New York City and Chicago – produces the Consumer Confidence Index, Leading Economic Indicators and other reports. Additional information is available at www.conference-board.org.
