U.S. Consumer Confidence Declines in October

The Conference Board's Index of Consumer Confidence weakened 1.6% during October (+0.4% y/y) to 102.6 after declining 4.0% during September to 104.3, revised from 103.0. It was the lowest level of confidence in five months. A reading of 100.0 for October had been expected in the Action Economics Forecast Survey.

The Expectations Index declined 1.0% (-3.0% y/y) to 75.6 after falling 8.3% in September. It fell 5.3% in August. The index remained up from a most recent low of 70.4 in February but was below this year’s high of 88.0 in July. The Present Situations Index fell 2.1% (+3.2% y/y) to 143.1 after easing 0.3% in September. It reached a high of 155.3 in June.

Nineteen percent of respondents characterized current business conditions as good in October, down from 21.0% in September and off a high of 23.4% in June. These figures are still above their low of 16.3% in July of 2022. Labor market readings were little changed this month. The jobs gap, representing the difference between respondents indicating that jobs are plentiful versus those saying jobs are hard to get, rose to 26.3% from 25.5% in September. Both were below the March 2022 high of 47.1. Calculated by Haver Analytics, this series has a 64% correlation with the unemployment rate over the last ten years. The jobs plentiful measure eased to 39.4% from 39.7% and remained down from the March 2022 high of 56.7%. The jobs hard-to-get measure of 13.1% compared to 14.2% in September. It remained near the highest level in two years. The jobs not-so-plentiful reading increased m/m to 47.5%, standing well above its 30.5% low in September 2021.

Consumers assessment of future business conditions improved as an increased 16.5% of respondents felt that conditions would get better in six months. That was down from 17.5% in August and a high of 20.9% in December. A reduced 16.0% of respondents felt there would be more jobs in six months, down from 20.0% in December. A lessened 15.6% expected income to increase in six months, down from 17.9% in September and a high of 19.6% in October of last year.

The expected inflation rate in twelve months edged higher to 5.9% from 5.7% in September. It remained below the 7.9% high in June of last year, but it was above the 4.4% low in January 2020.

An increased 59.4% of respondents felt that interest rates would be higher in twelve months, compared to 57.4% in September while a lessened 11.7% thought they would be lower. Thirty-two percent of respondents thought that stock prices would be higher in twelve months, compared to 32.6% in September. That remained up, however, from 29.6% twelve months ago. A slightly higher 33.7% thought stock prices would be lower in twelve months versus a high of 44.7% in July of last year.

The share of respondents planning to buy a home within six months eased to 5.3%. from 5.5% in September, below the October 2022 high of 7.4%. The percentage of respondents planning to buy a major appliance fell to 45.9% and has fallen from a high of 52.4% in October 2022.

The Consumer Confidence data are available in Haver's CBDB database. The total indexes, which are indexed to 1985=100, appear in USECON, and market expectations are in AS1REPNA.