Consumer Confidence Plunges to All-Time Low

The consumer confidence index decreased in October, plummeting to an all-time low of 38.0 from an upwardly revised 61.4 last month, the Conference Board reported yesterday.

The September index was initially reported as 59.8.

Economists polled by Thomson Reuters predicted the index would fall to 52.0.

The present situation index fell to 41.9 from an upwardly revised 61.1, originally reported as 59.8, while the expectations index decreased to 35.5 from an upwardly revised 61.5 last month, originally reported as 60.5.

“The impact of the financial crisis over the last several weeks has clearly taken a toll on consumers’ confidence,” said Lynn Franco, director of the Conference Board’s consumer research center. “The decline in the index (minus-23.4 points) is the third largest in the history of the series, and the lowest reading on record. In assessing current conditions, consumers rated the labor market and business conditions much less favorably, suggesting that the fourth quarter is off to a weaker start than the third quarter.

“Looking ahead, consumers are extremely pessimistic, and a significantly larger proportion than last month foresees business and labor market conditions worsening. Their earnings outlook, as well as inflation outlook, is also more pessimistic, and this news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season.”

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