Consumer confidence reels in the aftermath of shutdown
Consumer confidence took a big hit in October.
At 71.2, the index was down 11.2% from September's upwardly revised figure of 80.2, the Conference Board reports.
Confidence had declined slightly in September as well (from August's 81.8), which suggests that the Congressional standoff wasn't the only factor driving October's figures down (though it was still one of the sharpest drops since last January, during the sequestration crisis).
“Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers’ expectations," said Lynn Franco, director of economic indicators at The Conference Board. "Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996. However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months."
The Present Situation Index was down to 70.7 from 73.5. Though fewer people assessed current business conditions as "good," the amount of respondents viewing them as "bad" also decreased. There was a 0.1% increase in those viewing jobs as "plentiful," but at the same time, more people said that jobs are "hard to get."
Meanwhile, the Expectations Index fell to 71.5 from 84.7. This was consistent with a drop in those expecting business conditions to improve, as well as an increase in those expecting them to worsen.
October's reading is the lowest since April 2013, though it still comes in behind the year-ago index of 73.1.