The market had a rough time last week, but for most of the month it was sailing higher. How did that make consumers feel? Perhaps as if they had a little more shopping power? Well, as it turns out, not really.
The Conference Board’s Consumer Confidence Index fell again in October, the second month in a row, as shoppers still see plenty of reasons to cut back. The gloomy outlook hasn’t changed much since September and here is a pair of reasons why…
The Present Situation Index – The Conference Board’s Present Situation Index measures how consumers feel about business and labor conditions. This month it has dropped to 20.7, its worst reading in 26 years. It shows that consumers are not hopeful about future business earnings or this holiday shopping season.
Less Buying Power – In addition to unemployment strains, a lack of confidence in the economy is also causing buyers to put off major purchases like cars, homes, and appliances over the next six months.
Sure, it’s true; the US economy has already relied on far too much unhealthy and debt-fueled consumer spending in the past. At the same time, it feels like watching a train wreck to know that this month’s figures aren’t really pointing toward any kind of growth… unhealthy or otherwise.
More details are available from Bloomberg’s coverage of consumer confidence unexpectedly decreasing.
Photo: Ed Yourdon