EmailStory Stocks®
Archive
Last Update: 25-Oct-11 10:48 ET
Consumer Confidence Falls to its Lowest Level Since March 2009 in October
The Conference Board's Consumer Confidence Index fell sharply in October, falling from an upwardly revised 46.3 (from 45.4) in September to 39.8. The Briefing.com consensus estimate was pegged at 46.0.
Consumer confidence has fallen to its lowest level since March 2009, which coincided with the economy contracting 6.7% during that quarter.
Like the preliminary reading of the University of Michigan Consumer Sentiment Report for October, the drop in confidence was mostly due to worries about the future. The expectations index fell from 55.1 in September to 48.7 in October, reaching its lowest level since March 2009.
The decline in expectations is most likely the result of media reports constantly flashing high probabilities of another recession and not from economic fundamentals. The economic data have improved substantially since the beginning of the summer.
The current conditions index also deteriorated, declining from 33.3 in September to 26.3 in October, and is at its lowest level since November 2010. Fortunately, the lack of consumer confidence in the economy will most likely not have an adverse effect on consumption. Consumption tends to follow income, and income growth, while weak, remains positive.
Consumer confidence has fallen to its lowest level since March 2009, which coincided with the economy contracting 6.7% during that quarter.
Like the preliminary reading of the University of Michigan Consumer Sentiment Report for October, the drop in confidence was mostly due to worries about the future. The expectations index fell from 55.1 in September to 48.7 in October, reaching its lowest level since March 2009.
The decline in expectations is most likely the result of media reports constantly flashing high probabilities of another recession and not from economic fundamentals. The economic data have improved substantially since the beginning of the summer.
The current conditions index also deteriorated, declining from 33.3 in September to 26.3 in October, and is at its lowest level since November 2010. Fortunately, the lack of consumer confidence in the economy will most likely not have an adverse effect on consumption. Consumption tends to follow income, and income growth, while weak, remains positive.
