Consumer Confidence Falls to Lowest Level in Two Years
The news does not seem to be getting better. From Market Watch:
Consumers are less upbeat about the U.S. job market, with an index tracking the level of their confidence sliding to its lowest level since October 2005, shortly after Hurricane Katrina hammered the Gulf Coast, economic data showed Tuesday.
The Conference Board's consumer confidence index fell to 95.6 in October from a revised 99.5 in September, the private research organization reported.
"This was the third straight hefty fall, and it seems to suggest that the relative strength of the stock market is no longer enough to offset the impact of the housing disaster," wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics.
"Further weakening in business conditions has, yet again, tempered consumers' assessment of current-day conditions and may very well be a prelude to lackluster job growth in the months ahead," said Lynn Franco, economist for the Conference Board.
The percent of consumers with plans to buy a home within the next six months decreased from 3.0% in September to 2.7% in October -- the lowest rate since November 2004, according to the Conference Board. The percent with plans to buy a major appliance in coming months fell from 29.8% to 25.9% -- the lowest level since October 2005.
"This is really reflective of the downturn in housing," Franco said.
Cutbacks in major appliance purchases are "a sure sign of consumer strain and should be taken seriously," wrote Tony Crescenzi, chief bond market strategist for Miller Tabak & Co.
"This report is very negative in what is says about the U.S. economy," he wrote. "The figures are not recession-like," but they are indicative of a trend that could become difficult to arrest.
Also, consumers are growing more pessimistic about the short-term future and their "rather bleak outlook suggests a less-than-stellar" end of the year, Franco noted.