Consumer Confidence Drops Ahead of Holidays [AUDIO]
Consumer confidence took a tumble in October, but pessimism grew at an even quicker pace when the next six months were taken into consideration.
The Conference Board this week announced that its consumer confidence index fell to 71.2 in October, a nine point drop from the month prior. The number is closely watched because consumer spending accounts for nearly three-quarters of all economic activity.
Included in the confidence score is the Expectations Index, which gauges consumers' thoughts on economic activity in the near future. It plummeted from 84.7 last month to 71.5 this month.
"A combination of less job growth, and all the business about the government shutdown and the chances that we might default, has really erased all of the gains of the spring and summer," said Ken Goldstein of The Conference Board. "Four-and-a-half years after the recession, and you still have folks who are not going out to Short Hills or Menlo Park to shop for furniture and appliances."
He said the October report is unpleasant news for retailers ahead of the holiday season, both brick-and-mortar businesses and online companies. Consumers may benefit from big drops in prices in the days after Thanksgiving, an occurrence that retailers were hoping to avoid in 2013.
"Consumers might be coming in to look at the merchandise, but these kinds of numbers don't suggest that sales are going to be strong," Goldstein added.
A 90 or above would be considered a healthy consumer confidence score.