Consumer confidence dropped in October and is now at its lowest level since 2009.
The two components of the Consumer Confidence Index both fell. The Present Situation component decreased to 26.3 from 33.3 last month, while the Expectations index declined to 48.7 from 55.1.
Lynn Franco, director of the The Conference Board Consumer Research Center, said, “Consumer confidence is now back to levels last seen during the 2008-2009 recession. Consumer expectations, which had improved in September, gave back all of the gain and then some, as concerns about business conditions, the labor market and income prospects increased.”
She noted that the Present Situation component posted its sixth consecutive monthly decline as “pessimism about the current economic environment continues to grow.”
Maury Harris, economist at UBS, said, most of the decline was due to consumers’ assessments of present-day conditions.
Consumers also were less optimistic about the jobs front, with those anticipating more jobs ahead inching down to 11.3 percent from 11.9 percent, even as those who expect fewer jobs declined to 27.4 percent from 28.6 percent.
The respondents who anticipated that their incomes would increase six months from now fell to 10.3 percent from 13.5 percent. Those who said their incomes would decrease rose to 19.2 percent from 17.8 percent, while those who said their incomes would remain the same rose to 70.5 percent from 68.7 percent.
As for business conditions six months from now, those expecting improvement declined to 9.1 percent from 11.8 percent, while those who anticipate a worsening of conditions edged down to 21.5 percent from 21.9 percent. Those who expect business conditions to remain the same six months out rose to 69.4 percent 66.3 percent.
Separately, the U.S. equity markets ended Tuesday’s trading session down as investors kept a wary eye on today’s summit of European Union leaders. While the hope was to have a plan in place to turn around the debt crisis and avoid a global recession, news out of Europe suggests that EU officials still haven’t reached any agreement on the specifics of a plan.
The Dow Jones Industrial Average fell 207 points, or 1.7 percent, to 11,706.62, and the S&P Retail Index was down 14.67 points, or 2.7 percent, to 539.37.
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