A key measure of consumer confidence continued to slip in October, with consumers’ gauge of the current economic situation falling to a 26-year low, a research group said Tuesday.
The Conference Board, the New York-based research group, said its Consumer Confidence Index fell to 47.7 in October from an upwardly revised 53.4 in September.
Economists were expecting the index to increase to 53.5, according to a Briefing.com consensus survey. The figure, which is based on a survey of 5,000 U.S. households, is closely watched because consumer spending makes up two-thirds of the nation’s economic activity.
The index component that evaluates consumers’ judgment of the present situation dipped to 20.7 in October, the lowest since the 17.5 measured in February 1983. It stood at 23 in September.
“Consumers’ assessment of the present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment,” said Lynn Franco, director of the Conference Board Consumer Research Center.
Employers continued to cut jobs from their payrolls in September, as the unemployment rate rose to 9.8% and hit another 26-year high in September, according to a reportfrom the Labor Department earlier this month.
The percentage of those claiming that jobs are currently hard to get reached new high of 49.6%, while the number of consumers claiming that jobs are “plentiful” hit a new low at 3.4%.
“It is surprising how uniformly weak this report was,” said Mark Vitner, an economist at Wells Fargo. “The expectations had gotten ahead of themselves. Everyone thought that economy would follow the rebound in the stock market. But now that the rebound has leveled off, folks doubt whether conditions will get better.”
Meanwhile, a pair of economists speaking at a public forum on Tuesday said that economic improvement is on the way, but will take a while to solidify, especially in employment.
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