Americans took a dimmer view of the economy this month, the latest sign that households remain cautious as economic growth lags behind this year and the presidential election nears.
The Conference Board said Tuesday its index of consumer confidence dropped to 98.6 in October from 103.5 in September. Economists surveyed by The Wall Street Journal expected the index to fall to 101.2 in October.
Confidence, which soared in late summer, retreated this month due to consumers lowering their assessments of both the economy’s present state and the likelihood it will perform strongly in the future. The present situation index fell more than 7 points this month to 120.6, while the expectations index declined more than three points to 83.9.
Economists track confidence because when consumers are upbeat, they are more likely to boost spending, which in turn fuels economic growth. Household spending reflects about 70% of economic demand in the U.S.
Capital Economics economist Andrew Hunter said the lower confidence is likely due to jitters about the looming presidential election and a moderating labor market, whose expansion remains steady but has cooled from last year.
“Although consumer confidence appears to have weakened a little, it remains at a decent level by past standards,” Mr. Hunter said in a note to clients. “Accordingly, this suggests that a more severe slowdown in consumption growth over the rest of the year should be avoided.”
Consumers continue to spend steadily, helping the economy rebound from a sluggish first half of the year. Sales at retail stores, online retailers and restaurants rose 0.6% in September from August and have climbed 2.7% over the past year, the government reported this month.
U.S. consumer confidence retreats to 98.6 in October
October 26, 2016 by Leave a Comment