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US Consumer Confidence Falls More Than Expected In October: Survey

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Consumer confidence in the United States weakened more than anticipated in October, as upbeat sentiment on jobs and falling gas prices were overtaken by growing inflation jitters, a closely-watched survey showed Tuesday.

The consumer confidence index ticked down to 102.5 in October from a revised 107.8 reading last month, declining for the first time in three months as concerns about costs of living intensified, according to The Conference Board.

Gas and food prices both served as “main drivers” behind consumer worries, said Lynn Franco, senior director of economic indicators at The Conference Board.

Although intentions to buy homes, automobiles and big-ticket appliances still rose, Franco said inflationary pressures will continue to weigh on spending.

This “could result in a challenging holiday season for retailers,” she cautioned, adding that if demand falls short, this could result in steep discounting that could slash retailers’ profit margins.

The US Federal Reserve has raised borrowing costs aggressively this year as it battles surging inflation in the world’s biggest economy, but progress has been slow while consumers continued to spend and support economic activity.

Persistently high prices are fuelling expectations of a further rate hike at officials’ policy meeting next week.

Consumers’ expectations on the near-term outlook remains “dismal”, with an index tracking sentiment on income, business and labor market conditions lingering at a level associated with recession, the latest survey said.

This suggests “recession risks appear to be rising,” Franco added.

While the consumer surveys improved in recent months when gas prices eased to levels seen prior to Russia’s invasion of Ukraine, falling stock prices and soaring interest rates suggest “further improvements in confidence are unlikely,” said Ian Shepherdson of Pantheon Macroeconomics.

But he believes that real consumption will pick up in the final months of the year despite weakness in the survey, given that it does not directly track the extent to which people “still are able and willing to draw down savings built up during Covid,” he said.


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Agence France-Presse (AFP) is a French international news agency headquartered in Paris, France. Founded in 1835 as Havas, it is the world's oldest news agency.

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