Consumer confidence has taken another hit in October amid a period of uncertainty for the U.S. economy.
According to data released today by The Conference Board, the consumer confidence index dropped to 125.9 this month from September’s 126.3. Analysts polled by Dow Jones had forecast a reading of 128.
It marked the lowest record since June when consumer confidence slid to 124. In October, the U.S. and China reached a partial agreement that served as a temporary truce to their more-than-yearlong trade war, but impending tariffs on footwear, apparel and more consumer goods remained in place for December. An up-and-down stock market and a slowdown in last month’s hiring have also contributed to some of those jitters.
The current situation index, based on consumers’ assessment of current business and labor market conditions, rose from 170.6 to 172.3. Despite this improvement, the outlook remains mixed.
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In the report, the board’s expectations index, which measures consumers’ short-term outlook for income, business and labor market conditions, slid from 96.8 lin September to 94.9 in October. Further, the percentage of consumers that believed business conditions will improve over the next six months decreased from 20% to 18.6%. However, those who expect worsening business conditions also slipped from 13.3% to 11.6%.
“Consumer confidence was relatively flat in October, following a decrease in September,” said senior director of economic indicators Lynn Franco. “However, confidence levels remain high, and there are no indications that consumers will curtail their holiday spending.”
Releasing its holiday forecast early this month, the National Retail Federation predicted a 3.8% to 4.2% uptick in sales for the season. In 2018, holiday sales recorded a below-average gain of 2.1%. Retail sales in November and December are expected to rise in the range of $727.9 billion to $730.7 billion.
“There is significant economic unease, but current economic data and the recent momentum of the economy show that we can expect a much stronger holiday season than last year,” said NRF chief economist Jack Kleinhenz. “Job growth and higher wages mean there’s more money in families’ pockets, so we see both the willingness and ability to spend this holiday season.”
On Twitter, President Donald Trump also touted the economy’s strength, calling the report “very good.”
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