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Consumer confidence retreats in October

NEW YORK – Oct. 25, 2016 – The Conference Board Consumer Confidence Index declined to 98.6 in October from a previous reading of 103.5 in September. The Present Situation Index decreased from 127.9 to 120.6, while the Expectations Index that gauges attitudes about the future declined from 87.2 to 83.9.
“Consumer confidence retreated in October, after back-to-back monthly gains,” says Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat.”
But Franco says consumers’ expectations regarding their future income were relatively unchanged. “Overall, sentiment is that the economy will continue to expand in the near-term but at a moderate pace,” she says.
“The drop in consumer confidence was broad-based and was driven by heightened levels of political uncertainty, rising gasoline prices and a lackluster jobs report,” according to a report economist Chris Christopher sent to clients.
Dunkin’ Donuts CEO Nigel Travis blamed the confidence drop on gas prices, food stamp regulation changes, and “the overwhelming dampening effect of the presidential election … I think we’ll all be pleased when that’s past.”
Current conditionsConsumers saying business conditions are “good” in October decreased moderately from 27.7 percent to 26.2 percent, while those saying business conditions are “bad” increased from 15.8 percent to 17.7 percent.
Consumers’ assessment of the labor market was also less positive. Those stating jobs are “plentiful” decreased from 27.6 percent to 24.3 percent, while those claiming jobs are “hard to get” declined marginally from 22.3 percent to 22.1 percent.
Short-term outlookConsumers’ optimism regarding the short-term outlook was also somewhat less favorable in October. The percentage of consumers expecting business conditions to improve over the next six months decreased from 17.0 percent to 16.0 percent, while those expecting business conditions to worsen increased from 10.8 percent to 12.2 percent.
The proportion of consumers expecting more jobs in the months ahead decreased from 15.7 percent to 13.1 percent. However, those anticipating fewer jobs declined from 18.1 percent to 17.0 percent.
The percentage of consumers expecting their incomes to increase was unchanged at 17.5 percent, while the proportion expecting a decline decreased from 10.4 percent to 9.8 percent.
The monthly Consumer Confidence Survey is based on a probability-design random sample and conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was Oct. 13.
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Source: Florida Realtors Feed

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