Consumer confidence experienced a sharp decline in October, reflecting the impact that the month's government shutdown had on Americans.
[IMAGE]The ""Conference Board's"":http://www.conference-board.org/ Consumer Confidence Index, conducted for the group by Nielsen, fell to 71.2 in October after a moderate decline to 80.2 in September. The benchmark value for the index is 100, set in 1985.
""Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers' expectations. Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996,"" said Lynn Franco, director of economic indicators for the Conference Board. ""However, given the temporary nature of the current situation, confidence is likely to remain volatile for the next several months.""
The Present Situation Index, a measure of consumer perceptions about current economic conditions, declined moderately to 70.7 from 73.5 in September. Those claiming business conditions are ""good"" decreased to 19.0 percent from 20.7 percent, while those claiming conditions are ""bad"" edged down slightly to 23.0 percent from 23.9 percent.
Respondents' appraisal of the job market was similarly less favorable. The number of those saying jobs are ""plentiful"" was down just slightly to 11.3 percent, while those saying jobs are ""hard to get"" increased more than 2 percentage points to 35.8 percent.
Meanwhile, consumer expectations, which had softened in September, fell significantly in October, with the Expectations Index plunging from 84.7 to 71.5.
Those expecting business conditions to improve over the next six months fell more than 4 percentage points to 16.0 percent, while those expecting conditions to worsen increased to 17.5 percent--a gain of 7.2 percentage points.
Again, the outlook for labor was also more pessimistic. The number of respondents anticipating more jobs in the coming months fell to 15.3 percent, while those expecting few jobs increased to 22.7 percent.
Asked about their income, 15.8 percent of consumers said they expect an increase in the near future--up from 15.1 percent. However, the number of respondents expecting a decrease rose to 15.4 percent from 13.9 percent.