Consumer confidence plummeted in October to its lowest level in more than seven years as anthrax scares and the Sept. 11 terror attacks have taken its toll on American’s view of job security and the economy.
The Conference Board, New York, said Tuesday that its Consumer Confidence Index fell 85.5 from 97 in September (1985=100). The 11.5-point drop pushed the Index to its lowest level since February 1994. It also marks the fourth consecutive month that the Index has fallen.
The Present Situation Index fell from 125.4 to 107.6. The Expectations Index, a widely watched barometer of future economic activity, dropped from 78.1 to 70.8.
The Conference Board’s Consumer Confidence Survey-the most comprehensive survey of consumers in the U.S., covering all nine census regions of the country-is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup, a member of The Interpublic Group of Companies.”
“The economic outlook is becoming increasingly pessimistic, with consumer sentiment continuing to fall,” says Lynn Franco, director of The Conference Board’s Consumer Research Center. “Widespread layoffs and rising unemployment do not signal a rebound in confidence anytime soon. With the holiday season quickly approaching, there is little positive stimuli on the horizon.”
Consumers’ assessment of current conditions is much less positive than in September, according to the Index. Those rating current business conditions as “bad” rose from 18.3% to 20.6%. Those rating conditions as “good” declined from 22.3% to 18.9%. Consumers claiming jobs are “hard to get” rose from 18.8% to 20.7%. Those reporting jobs are plentiful fell from 27.1% to 21.0%.
Consumers’ outlook for the next six months continues to deteriorate. Those expecting an improvement in business conditions over the next six months increased from 15.7% to 18%, according to the Index. But those anticipating conditions to weaken rose from 15.8%to 20.3%.
The employment outlook was also mixed. Currently, 14% of consumers expect more jobs to become available, up slightly from 12.9% last month. But those expecting fewer jobs increased from 22.5 percent to 28.9 percent. Only 17.7% of consumers anticipate a gain in their incomes, down from 21.1% in September.