Conference Board Consumer Confidence Readings Showing Some Strength

The Conference Board's measure had been alone among consumer confidence readings in signaling solid strength but less so now following a weaker-than-expected report for October that does, however, have its points of strength. The headline index fell nearly 5 points to 98.6 vs Econoday's consensus for 101.0 with both the present situation component, at 120.6 vs 127.9, and the expectations component, at 83.9 vs 87.2, posting their lowest readings since July.

But a key strength this month is a continued decline among those who describe jobs as currently hard to get, down 2 tenths to 22.1 percent in what is a positive indication for the October employment report. Another positive is a widening in the spread between those who see their income prospects improving vs declining, to 7.7 percentage points from 7.1 points.

The weakness in the report is centered in both the current and future assessments of business conditions where optimism still prevails but to a lesser degree. A widening in pessimism over future job prospects is also a negative as are dips in buying plans for both homes and appliances. Inflation expectations, after popping higher in August, are also down, 2 tenths lower and back at 4.8 percent.

The consumer has cooled since the second quarter but has still posted respectable numbers where it counts most which is spending of course. And today's report doesn't point to a breakdown in spending and is relatively positive given general economic softness not to mention uncertainties tied to the approach of the presidential election.

Recent History Of This Indicator:
Readings on consumer confidence as a whole have been mixed. Showing by far the most strength is the Conference Board's consumer confidence index which is up nearly 7-1/2 points over the last two months, coming in at 104.1 in September for a new cycle high. The jobs-hard-to-get reading has been coming down consistently and sizably and has been pointing at improvement in the labor market. Forecasters thought the consumer confidence index would give up some of August's gains in the September report, which it didn't, and they see October's report, at a consensus 101.0, giving back a big part of September's gain.