US Consumer Confidence Declined in October
Index Pulls Back after Two Months of Gains as Views of the Present Situation Softened
The Conference Board Consumer Confidence Index® decreased in October after back-to-back monthly gains. The Index now stands at 102.5 (1985=100), down from 107.8 in September. The Present Situation Index—based on 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 outlook for income, business, and labor market conditions—declined to 78.1 from 79.5.
"Consumer confidence retreated in October, after advancing in August and September," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. "The Present Situation Index fell sharply, suggesting economic growth slowed to start Q4. Consumers' expectations regarding the short-term outlook remained dismal. The Expectations Index is still lingering below a reading of 80—a level associated with recession—suggesting recession risks appear to be rising."
"Notably, concerns about inflation—which had been receding since July—picked up again, with both gas and food prices serving as main drivers. Vacation intentions cooled; however, intentions to purchase homes, automobiles, and big-ticket appliances all rose. 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."
Present Situation Consumers' assessment of current business conditions was less favorable in October.
17.5% of consumers said business conditions were "good," down from 20.7%.
24.0% of consumers said business conditions were "bad," up from 20.9%.
Consumers' appraisal of the labor market was also less upbeat.
45.2% of consumers said jobs were "plentiful," down from 49.2%.
12.7% of consumers said jobs were "hard to get," up from 11.1%.
Expectations Six Months Hence Consumers were mixed about the short-term business conditions outlook in October.
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%.
Consumers were conflicted about the short-term labor market outlook.
19.8% of consumers expect more jobs to be available, up from 17.4%.
However, 20.8% anticipate fewer jobs, up from 17.8%.
Consumers were ambivalent about their short-term financial prospects.
18.9% of consumers expect their incomes to increase, up from 18.3%.
However, 15.1% expect their incomes will decrease, up from 13.8%.
The monthly Consumer Confidence Survey®, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. The cutoff date for the preliminary results was October 19.
Source: October 2022 Consumer Confidence Survey® The Conference Board
The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. Subscription information and the technical notes to this series are available on The Conference Board website: https://www.conference-board.org/data/consumerdata.cfm.
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