U.S. Consumer Confidence Shows Sharp Pullback In October

(RTTNews) - After reporting an unexpected improvement in U.S. consumer confidence in the previous month, the Conference Board released a report on Tuesday showing that confidence pulled back rather sharply in the month of October.

The Conference Board said its consumer confidence index tumbled to 97.6 in October from a downwardly revised 102.6 in September.

Economists had been expecting the index to dip to 102.5 from the 103.0 originally reported for the previous month.

Lynn Franco, Director of Economic Indicators at the Conference Board, said, "Consumers were less positive in their assessment of present-day conditions, in particular the job market, and were moderately less optimistic about the short-term outlook."

"Despite the decline, consumers still rate current conditions favorably, but they do not anticipate the economy strengthening much in the near-term," he added.

The report said the president situation index slid to 112.1 in October from 120.3 in September, as consumers' appraisal of current conditions was somewhat less positive.

The percentage of consumers saying business conditions are "good" fell to 26.5 percent from 28.1 percent, while those saying conditions are "bad" rose to 18.3 percent from 16.4 percent.

The Conference Board said consumers were also less upbeat about the job market, as those saying jobs are "plentiful" dropped to 22.2 percent from 24.8 percent and those claiming jobs are "hard to get" edged up to 25.8 percent from 24.9 percent.

Consumer optimism about the short-term outlook was also more subdued, dragging the expectations index down to 88.0 in October from 90.8 in September.

While the percentage of consumers expecting business conditions to improve over the next six months was unchanged at 18.1 percent, those expecting conditions to worsen inched up to 10.6 percent from 10.4 percent.

The outlook for the labor market was also slightly less optimistic, with consumers anticipating more jobs in the months ahead dipping to 14.5 percent from 14.9 percent and those anticipating fewer jobs rising to 16.9 percent from 15.9 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "It appears that the slowdown in payroll employment growth is now showing up in the confidence surveys."

"At the margin, that supports our view the Fed will wait until early next year before it begins to hike interest rates," he added.

Friday morning, the University of Michigan is scheduled to release its final report on U.S. consumer sentiment in the month of October.

The consumer sentiment index is expected to be upwardly revised to 92.5 from the preliminary reading of 92.1. The index came in at 87.2 in September.