U.S. consumer confidence falls sharply in OctoberConsumer confidence decreased sharply in October as consumers were concerned about the government shutdown and debt-ceiling crisis, according to The Conference Board.
The Conference Board's Consumer Confidence Index fell to 71.2 in October from 80.2 in September. A reading of 90 or higher indicates a healthy economy.
The index measures how shoppers feel about business conditions, the job market and the next six months. Economists watch the index closely because consumer spending accounts for about 70 percent of economic activity and is a critical part of a strong rebound.
Those expecting business conditions to improve during the next six months fell to 16 percent from 20.6 percent, and those expecting business conditions to worsen increased to 17.5 percent from 10.3 percent.
Additionally, 15.3 percent expect more jobs during the next six months compared with 16.1 percent in September. Those expecting fewer jobs increased from 19.1 percent to 22.7 percent.
"Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers' expectations," says Lynn Franco, The Conference Board's director of economic indicators. "Similar declines in confidence were experienced during the payroll tax hike earlier this year, fiscal cliff discussions in late 2012 and government shutdown in 1995-96. However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months."
Date : 11/1/2013