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Consumer confidence unexpectedly deteriorated in the month of October, according to a report released by the Conference Board on Tuesday, with the consumer confidence index showing a notable decline amid continued concerns about labor market conditions.
The report showed that the consumer confidence index fell to 47.7 in October from a revised 53.4 in September. Economists had been expecting the index to edge up to 53.5 from the 53.1 originally reported for the previous month.
A deterioration in consumers' assessment of present-day conditions contributed to the unexpected decrease, with the present situation index falling to 20.7 in October from 23.0 in September. With the decrease, the index fell to its lowest level in twenty-six years.
Lynn Franco, Director of the Conference Board Consumer Research Center said, "Consumers' assessment of present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment."
The twenty-six year low for the present situation index coincides with an unemployment rate that is at its highest level in twenty-six years.
The report showed that those claiming business conditions are "bad" rose to 47.1 percent in October from 46.3 percent in September, while those claiming conditions are "good" fell to 7.7 percent from 8.6 percent.
Additionally, those saying jobs are "hard to get" increased to 49.6 percent in October from 47.0 percent in September, while those claiming jobs are "plentiful" decreased to 3.4 percent from 3.6 percent in the previous month.
"The short-term outlook has also grown more negative, as a greater proportion of consumers anticipate business and labor market conditions will worsen in the months ahead," Franco said.
The expectations index fell to 65.7 in October from 73.7 in September, as those expecting an improvement in business conditions over the next six months fell to 20.8 percent from 21.3 percent and those expecting conditions to worsen rose to 18.3 percent from 14.6 percent.
Consumers' outlook for the labor market was also more negative, with those expecting more jobs in the months ahead falling to 16.3 percent in October from 18.0 percent in September and those expecting fewer jobs rising to 26.6 percent from 22.9 percent.
Franco said, "Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays."
The Conference Board said consumers expecting an increase in their incomes decreased to 10.3 percent in October from 11.2 percent in the previous month.
Friday morning, Reuters and the University of Michigan are due to release their revised report on consumer sentiment in the month of October, with economists expecting the consumer sentiment index to be revised up to a reading of 70.0.
The preliminary report released earlier this month showed that the consumer sentiment index fell to 69.4 in October from the final September reading of 73.5. Economists had been expecting a much more modest decrease to a reading of 73.3.
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