Consumer Confidence Declines.

October Results

The Conference Board's Consumer Confidence Index, which had improved in September, fell sharply in October. The Index now stands at 135.2 (1985=100), down from 142.5. The Present Situation Index decreased from 182.5 to 177.0. The Expectations Index also declined, from 115.9 to 107.4.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO Research, Inc., an NFO Worldwide Company and member of The Interpublic Group of Companies (NYSE: IPG).

In October, consumers were significantly less buoyant than in September. The percentage of respondents that felt current business conditions were "good" fell to 43.5 percent from 47.9 percent. Those rating conditions as "bad" increased from 8.8 percent to 9.5 percent. Consumers claiming jobs were "hard to get" rose to 12.1 percent from 10.6 percent in September.

Consumers were considerably less optimistic about the short-term outlook in October than in September. The percentage of respondents expecting an improvement in business conditions over the next six months decreased to 16.5 percent from 19.0 percent. The proportion anticipating conditions to worsen rose to 7.2 percent from 5.6 percent. The employment outlook was also less favorable. Currently, 13.1 percent of consumers expect fewer jobs to become available, up from 10.9 percent. Income prospects were also less optimistic than in the prior survey. Now, only 24.2 percent of respondents anticipate an increase in their income, down substantially from 28.1 percent.

Both components of the Consumer Confidence Index posted declines, suggesting that this erosion in confidence has been prompted by a cooling economy and apprehension regarding soaring oil prices and volatility in the financial markets.

Lynn Franco