Oct. U.S. Consumer Confidence Down a Bit After Sept. Surge

While views of current conditions improved, Americans were less optimistic about the short-term future, with little to suggest “momentum in the final months of 2020.”

BOSTON – The Conference Board’s Consumer Confidence Index declined slightly this month after a sharp increase in September. The Index now stands at 100.9, down from last month’s 101.3.

However, there was a sharp divide this month as attitudes about the present rose and attitudes about the future fell. The Present Situation Index – consumers’ assessment of current business and labor market conditions – increased from 98.9 to 104.6. However, the Expectations Index – consumers’ short-term outlook for income, business and labor market conditions – decreased from 102.9 last month to 98.4 in October.

“Consumer confidence declined slightly in October following a sharp improvement in September,” says Lynn Franco, senior director of economic indicators at The Conference Board. “Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs.”

Franco sees little to “suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high.”

Current conditions: The percentage of consumers claiming business conditions are “good” was virtually unchanged, going from 17.6% to 17.5% – but those claiming business conditions are “bad” decreased from 37.0% to 33.9%.

Consumers’ assessment of the labor market was more favorable. The percentage of consumers saying jobs are “plentiful” increased from 23.6% to 26.5%, while those claiming jobs are “hard to get” decreased slightly from 20.3% to 19.9%.

Future expectations: Consumers, however, are now less optimistic about the short-term outlook than they were a month ago. The percentage expecting business conditions to improve over the next six months decreased slightly from 36.7% to 36.3%, while those expecting business conditions will worsen increased from 15.8% to 17.0%.

Consumers’ optimism about the job market was mixed. The proportion expecting more jobs in the months ahead increased slightly from 32.9% to 33.2% – but those anticipating fewer jobs also increased, from 16.1% to 20.2%.

Regarding their short-term income prospects, the percentage of consumers expecting an increase improved from 17.3% to 18.4%, but the proportion expecting a decrease also increased from 13.0% to 14.2%.

The monthly Consumer Confidence Survey is based on a probability-design random sample and conducted for The Conference Board by Nielsen, a global provider of information and analytics.

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