- Conference Board's gauge declined to 97.6, lower than forecast
- Drop in current conditions was biggest since January 2013
Consumer confidence fell in October to a three-month low as Americans became less upbeat about the labor market.
The Conference Board’s index decreased to 97.6 from a revised September reading of 102.6, the New York-based private research group said Tuesday. The median forecast in a Bloomberg survey of economists was 102.9. The cutoff date for the survey was Oct. 15.
Americans’ views of current conditions in the economy dropped by the most since January 2013 after payroll growth slowed in the prior two months and wage gains remained modest. At the same time, falling gasoline prices may help keep consumer spending from faltering after two months of tepid retail sales.
“It overshot a little bit last time around with payroll and job growth slowing down,” David Kelly, chief global strategist at JPMorgan Asset Management, said before the report. “Generally, consumers are in pretty good shape. They’re just not that optimistic.”
Estimates in the Bloomberg survey ranged from 98 to 106.2. The confidence gauge reached an eight-year high of 103.8 in January.
The Conference Board’s index of current conditions decreased to 112.1 this month from 120.3 in September. The share of Americans who said jobs were hard to get rose to 25.8 percent from 24.9 percent. The proportion viewing viewing business conditions as bad climbed to a six-month high.
“Despite the decline, consumers still rate current conditions favorably, but they do not anticipate the economy strengthening much in the near-term,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
Another report Tuesday showed orders for business equipment unexpectedly declined in September. Bookings for non-military capital goods excluding aircraft dropped 0.3 percent after a 1.6 percent August decrease that was twice as large as previously estimated, according to the Commerce Department.
The measure of consumer expectations for the next six months dropped to a three-month low of 88 from 90.8 in September. The outlook for job opportunities and incomes diminished this month.
Buying plans were mixed, with fewer expecting to purchase cars, while more planned to purchase appliances and homes, the Conference Board’s data showed. The share of Americans planning a vacation in the next six months rose to the highest level since October 2012.