A measure of consumer confidence has seesawed back down on less upbeat assessments of business and labor conditions that could signal an impending recession.
The Conference Board reported its Consumer Confidence Index fell 5.3 points to 102.5 in October. The loss followed gains in September and August. Components of the index tracking current conditions and expectations both declined for October.
Lynn Franco, senior director of economic indicators at the Conference Board, said the present situation component of the index fell sharply, suggesting slowing economic growth for the fourth quarter.
Consumers’ short-term outlook remains “dismal,” Franco said. “The expectations index is still lingering below a ready of 80 — a level associated with recession — suggesting recession risks appear to be rising.”
Intentions to purchase homes, automobiles and appliances increased, she said. But so did concerns about inflation, driven by rising gasoline and food prices.
“Looking ahead, inflationary pressures will continue to pose strong headwinds to consumer confidence and spending, which could result in a challenging holiday season for retailers. And, given inventories are already in place, if demand falls short, it may result in steep discounting, which would reduce retailers’ profit margins,” Franco said.
The New York-based think tank bases the Consumer Confidence Index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity.
Less optimistic assessments of current conditions pulled down the present situation component of the index 11.3 points to 138.9.
The proportion of those responding to the survey upon which the October index was based who described business conditions as “good” fell 3.2 points to 17.5 percent. The share of those who said conditions were “bad” rose 3.1 points to 24 percent.
The proportion of respondents who said jobs were “plentiful” fell four points to 45.2 percent. The share of those who said jobs were “hard to get” rose 1.6 points to 12.7 percent.
Less upbeat outlooks pulled down the expectations component of the index 1.4 points to 78.1.
The share of those who expected business conditions to improve over the next six months rose six-tenths of a point to 19.2 percent. But the proportion of those anticipating worsening conditions increased more — 1.4 points to 23.3 percent.
The share of those who expected more jobs to become available in coming months rose 2.4 points to 19.8 percent. The proportion of those who believed fewer jobs rose more — three points to 20.8 percent.
While 18.9 percent of respondents expected their incomes to increase, 15.1 percent anticipated lower incomes.