Consumer Confidence Sinks Back to 2008-09 Crisis Level

The Conference Board’s consumer confidence index dropped to 39.8 in October, a level not seen since the immediate months following the financial crisis peak of late 2008 and early 2009.
The index was down from 46.4 in September. Economists had anticipated a jump in the index for October.
“Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased,” said Lynn Franco, Director of The Conference Board Consumer Research Center:
While the confidence index is based on outlook, consumers’ assessment of present-day economic conditions deteriorated further in October.
Those claiming business conditions are “bad” increased to 43.7 percent from 40.5 percent, while those claiming business conditions are “good” decreased to 11.0 percent from 12.1 percent, the Conference Board reported. Consumers’ sentiment on the labor market is also declining. Those claiming jobs are “plentiful” decreased to 3.4 percent from 5.6. However, those saying jobs are “hard to get” decreased to 47.1 percent from 49.4 percent.
Consumers’ short-term outlook, which had improved last month, also reversed course in October. Those anticipating business conditions to improve over the next six months decreased to 9.1 percent from 11.8 percent, while those expecting business conditions to worsen slipped to 21.5 percent from 21.9 percent.
Income levels have much to do with the level of confidence in the economy, index results show.
Since its peak in February, the consumer confident index has plunged 32 points. The index representing consumers earning $50,000 or more has collapsed by nearly 39 points.  The index for households earning less than $15,000 has dropped just below 11 points.
The disparity is troubling because higher-income households contribute significantly to overall economic recovery through consumer spending.

Leave a Reply

Your email address will not be published. Required fields are marked *