By Ashley M. Heher, AP
Worsening job picture fuels slide in confidence
CHICAGO — Consumers’ confidence about the U.S. economy fell unexpectedly in October as job prospects remained bleak, a private research group said Tuesday, fueling speculation that an already gloomy holiday shopping forecast could worsen.
The Consumer Confidence Index, released by The Conference Board, sank unexpectedly to 47.7 in October — its second-lowest reading since May.
Forecasters predicted a higher reading of 53.1.
A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.
The index has seesawed since reaching a historic low of 25.3 in February and climbed to 53.4 in September.
Economists watch consumer confidence because spending on goods and services by Americans accounts for about 70 percent of U.S. economic activity by federal measures. While the reading doesn’t always predict short-term spending, it’s a helpful barometer of spending levels over time, especially for expensive, big-ticket items.
Recent economic data, from housing to manufacturing, has offered mixed signals but some evidence that an economic recovery might be slow.
But on Tuesday, the figures showed that shoppers have a grim outlook for the future, The Conference Board said, expecting a worsening business climate, fewer jobs and lower salaries. That’s particularly bad news for retailers who depend on the holiday shopping season for a hefty share of their annual revenue.
“Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays,” said Lynn Franco, director of The Conference Board’s Consumer Research Center.
Economists expect holiday sales to be at best flat from a year ago, which saw the biggest declines since at least 1967 when the Commerce Department started collecting the data.
The Consumer Confidence Index survey, which was sent to 5,000 households, had a cutoff date of Oct. 21.
The news came on the heels of rosier data about the nation’s housing market.
The Standard & Poor’s/Case-Shiller home price index, which studies real estate transactions in 20 major cities, showed home prices rose in August, the third straight monthly increase and a sign that a housing recovery might be taking hold.
The measure showed the home price index climbed 1 percent from July to a seasonally adjusted reading of 144.5. While prices are down 11.4 percent from August a year ago, the annual declines have slowed since February.
Prices are at levels not seen since August 2003 and have fallen almost 30 percent from the peak in May 2006.
The latest index shows a widespread turnaround with prices rising month-over-month in 15 metro areas since June.
The Dow Jones industrials wavered on the dueling reports, but the index was up nearly more than 64 points to 9,932.20 by mid-afternoon.
Related News
Stocks give up early gains after report shows consumer confidence falls in OctoberOctober 27th, 2009 Stocks trade mixed as consumer confidence fallsNEW YORK — A disappointing reading on consumer confidence spoiled an early rally in the stock market. Stocks traded mixed Tuesday after a report from a private research group caused worries that consumers might not be ready to spend this holiday season.
Consumer confidence seen holding steady as shoppers still gloomy heading into holidaysOctober 27th, 2009 Ahead of the Bell: Consumer confidenceNEW YORK — A preliminary report on consumer confidence is expected to hold steady in October compared with September, though the mood is still gloomy heading into the critical holiday season. Economists surveyed by Thomson Reuters expect the Conference Board's Consumer Confidence Index, due out Tuesday at 10 a.m.
Stocks reverse early gains after disappointing reading on consumer confidenceSeptember 30th, 2009 Drop in consumer confidence pulls stocks lowerNEW YORK — Stocks have reversed early gains and are falling on a report showing Americans are still downbeat on the economy. The Conference Board says its consumer confidence index fell to 53.1 in September, down from 54.5 in August, and much lower than the reading of 57 that economists expected.
Dollar mixed on reports home prices continue to rise, consumer confidence unexpectedly fallsSeptember 30th, 2009 Dollar mixed on consumer confidence, home pricesNEW YORK — The dollar inched up against the euro but fell against the pound Tuesday as investors weighed a surprise drop in consumer confidence and a third straight monthly increase in home prices. The 16-nation euro slipped to $1.4568 in late New York trading from $1.4591 late Monday, while the British pound rose to $1.5941 from $1.5869.
Private research group says consumer confidence retreats in September amid job worriesSeptember 30th, 2009 Consumer confidence unexpectedly falls in Sept.NEW YORK — Cconsumers' confidence in the economy falls in September as Americans' worries about job security offset any enthusiasm about the rally in the stock market. The Conference Board says that the Consumer Confidence Index now stands at 53.1, down from the revised 54.5 reading in August.
US stocks fall despite housing gainsSeptember 29th, 2009 NEW YORK - US stocks fell Tuesday amid a drop in consumer confidence and concerns about unemployment, even as data showed housing prices soared in July by the most in four years. Consumer confidence dropped fell to 53.1 points from a revised 54.5 in August, amid rising unemployment, the New York-based Conference Board said Tuesday.
Consumer sentiment up more than expected in Aug., expectations at highest level since Dec. '07August 25th, 2009 Consumer sentiment improves more than expectedWASHINGTON — Consumer sentiment rose more than expected in August and expectations hit the highest level since the recession began, indications that Americans' pessimism about the economy may be lifting. The housing sector also showed signs of life as a national measure of home prices posted its first quarterly increase in three years.
Consumer sentiment improves more than expected to 54.1 in AugustAugust 25th, 2009 Consumer sentiment up more than expected in AugustWASHINGTON — Consumer sentiment rose more than expected in August, an indication that Americans' pessimism about the economy may be lifting. The New York-based Conference Board says its Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July.
Summary Box: Consumer sentiment improves, while home prices rise for first time in 3 yearsAugust 25th, 2009 Summary Box: Consumer sentiment, home prices upWHAT HAPPENED?: Consumer confidence improved more than expected in August, and a nationwide gauge of home prices rose for the first time in three years, a sign the housing sector is stabilizing. WHAT DOES IT MEAN?: Improved consumer sentiment and higher home prices could mean consumers will spend more in the coming months, providing a much-needed boost to the economy.
Asian stocks tumble as US consumer fears eclipse Japanese growth; Tokyo slides nearly 3 pctAugust 17th, 2009 Asian stocks tumble amid worries about US consumerHONG KONG — Asian stocks fell sharply Monday as signs of weak U.S. consumer confidence aggravated doubts in the recovery's strength, overshadowing news that Japan's economy climbed out of its recession last quarter.
Fed signals end of government debt-buying program; says economy 'leveling out'August 12th, 2009 Fed signals vote of confidence in economyWASHINGTON — The Federal Reserve delivered a vote of confidence in the recovery on Wednesday, declaring that economic activity is "leveling out." The central bank also signaled that it would end one of its programs aimed at propping up the economy, and kept a key lending rate at a record low. The Fed said it would gradually slow the pace of its program to buy $300 billion worth of Treasury securities so that it will shut down at the end of October, versus September.
Global recovery is set to begin, says bank reportJune 16th, 2009 TORONTO - The worst is over for the global economy and a recovery is likely to begin later this year, says a bank report released here Monday. The global economic crisis has bottomed out and positive indicators have begun to emerge, said the report by the Royal Bank of Canada which is the top bank in the country.
New England newspaper chain Gatehouse Media Inc. to cut salaries of most employees 8 percentMay 29th, 2009 Gatehouse paper chain to cut salaries 8 percentBOSTON — Newspaper publisher GateHouse Media Inc. is temporarily cutting the salaries for most of its 1,500 employees in New England an average of nearly 8 percent to save money and avoid job cuts.
Private research group says consumer confidence soars in April amid hopeful economic signsApril 28th, 2009 Consumer confidence soars in AprilNEW YORK — A private research group says that consumer confidence soared in April amid hopeful signs that the economy is starting to stabilize. The Conference Board says that its Consumer Confidence Index rose 12 points to 39.2, up from a revised 26.9 in March.
Stocks fluctuate in narrow range as consumer confidence blows past analyst forecasts in AprilApril 28th, 2009 Jump in consumer confidence gives boost to stocksNEW YORK — Investors are setting aside some of their worries about the economy as a closely watched measure of consumer confidence soars in April. Stocks had been lower on worries about fallout from the swine flu and banks that may need to raise capital following government "stress tests."
But a midmorning report showing a surge in consumer confidence tempered those concerns.
Loading ...