Consumer confidence retreated in October. Consumers were less optimistic about both the current situation and the near term outlook.
The Consumer Confidence Index, reported by the Conference Board, decreased to 98.6, from 103.5 in September. Both the present situation and the expectations index dropped. The present situation index fell to 120.6, from 127.9 and the expectations index declined to 83.9, from 87.2.
Consumers are less optimistic about current business conditions than in September. Consumers’ assessments of current business conditions shifted from both “good” and “normal” to “bad”. The share of respondents rating business conditions “bad” rose by 1.9 percentage points from 15.8% to 17.7%, with the net gain coming from the net declines in assessments of “good” (1.5 percentage points) and “normal” (0.4 percentage point).
Similar to consumers’ assessments of current business conditions, expectations of business conditions over the next six months softened. The share of respondents expecting future business conditions to be worse rose from 10.8% to 12.2%. Most of the 1.4 percentage point increase (1 percentage point) came from the share of respondents expecting better business conditions, while the rest (0.4 percentage point) came from the share of respondents expecting future business conditions to be the same.
Consumers’ assessments of current employment conditions were mixed. The share of respondents reporting that jobs were “not so plentiful” increased from 50.1% to 53.6%, but the net increase drew from both upgrades and downgrades in assessments. Most of the 3.5 percentage point net increase (3.3 percentage points) was the result of a net decline in assessments of “jobs plentiful”, a downgrade, while the rest (0.2 percentage point) was the result of a net decline in assessments of jobs “hard to get”, an upgrade.
Similar to consumers’ assessments of current employment conditions, expectations of employment over the next six months were also mixed. The share of respondents expecting “same” increased from 66.2% to 69.9%, while the shares of respondents expecting “more jobs” and “fewer jobs” dropped.
The Conference Board also reports the share of respondents planning to buy a home within six months. The share of respondents planning to buy a home declined to 5.1%, from 5.9%. The share of respondents planning to buy a newly constructed home and an existing home were 0.8% and 2.7%, respectively; the share of respondents who were “uncertain” whether they would buy a newly constructed or an existing home was 1.6%.
Despite the monthly volatility the trend in the share of respondents planning to buy a home within six months has been steadily upward since the end of the recession.