Oct. 27, 2004--Amid runaway oil prices and political uncertainty as the election draws near, consumer confidence took another hit in October, slipping to its lowest level in seven months.
The Conference Board announced Tuesday that its Consumer Confidence Index reading fell to 92.8 in October, down from 96.7 last month and marking the third consecutive monthly decline. The latest downturn resulted largely from a steep drop in consumer expectations, which fell to 92.0 from 97.7 a month ago. More consumers expected conditions to worsen in the next six months--particularly with regard to jobs--than did in September, while the number expecting business conditions to improve declined.
"This is all about consumers being disappointed about the lack of job growth," said Ken Goldstein, a Conference Board economist. "What's different this time is that not only did consumers downgrade their appraisal of current conditions, for the first time we saw a significant fall in future expectations. It's as if they were absolutely unshaken in the belief that things would get better soon, but now I think that's starting to weaken."
The number of consumers saying jobs are "plentiful" at the moment increased slightly while those claiming jobs are "hard to get" eased a bit. But the number of consumers expecting fewer jobs to become available in the coming months rose to 18.4% from 16.2% the previous month, while those anticipating more jobs to become available slipped to 16.5% from 17.8%.
Goldstein noted that the index still remained relatively high by historical standards but that an increasingly pessimistic trend does not bode well for the coming retail season.
"The fact that this is happening four weeks before the holiday season has to put the fear of God into retailers," he said. "If this continues we'd be lucky to see 2% growth in holiday retail sales this year."