Confidence takes a fall in October
Bleak job picture hits outlook for holiday shopping
CHICAGO - Consumers’ confidence about the US economy fell unexpectedly in October as job prospects remained bleak, a private research group said yesterday, fueling speculation that an already gloomy holiday shopping forecast could worsen.
The consumer confidence index, released by the Conference Board, sank unexpectedly to 47.7 in October - its second-lowest reading since May.
Forecasters predicted a higher reading of 53.1.
A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.
The index has seesawed since reaching a historic low of 25.3 in February and climbed to 53.4 in September.
Economists watch consumer confidence because spending on goods and services by Americans accounts for about 70 percent of US economic activity by federal measures. While the reading doesn’t always predict short-term spending, it’s a helpful barometer of spending levels over time, especially for expensive, big-ticket items.
Recent economic data, from housing to manufacturing, have offered mixed signals but some evidence that an economic recovery might be slow.
But yesterday, the figures showed that shoppers have a grim outlook for the future, the board said, expecting a worsening business climate, fewer jobs, and lower salaries. That’s particularly bad news for retailers who depend on the holiday shopping season for a hefty share of their annual revenues.
“Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays,’’ said Lynn Franco, the director of the board’s Consumer Research Center.
Economists expect holiday sales to be at best flat from a year ago, which saw the biggest declines since at least 1967, when the Commerce Department started collecting the data.
The consumer confidence survey, which was sent to 5,000 households, had a cutoff date of Oct. 21.