US consumer confidence dips as labor-market pain weighs on economic expectations
- The Conference Board's Consumer Confidence Index weakened in October to 100.9 from 101.3 as labor-market damage dragged on sentiments.
- Economists surveyed by Bloomberg expected the gauge to improve to 102.
- While the organization's Present Situation Index climbed 5.7 points to 104.6, a 4.5-point drop in its gauge of economic expectations drove the broad decline.
- "There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020," Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.
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Americans' confidence in the US economy dimmed in October as lasting weakness in the labor market curbed optimism elsewhere.
The Conference Board's index of consumer confidence declined to 100.9 from 101.3, marking a reversal from September's 15-point surge. Economists surveyed by Bloomberg expected the index to improve to 102.
The organization's Present Situation Index, which tracks current labor market and business conditions, swung higher to 104.6 from 98.9. Its gauge of economic expectations, however, sank to 98.4 from 102.9. The gloomier outlook is mostly tied to continued pain in the labor market, as jobless claims and the unemployment rate both remain elevated, said Lynn Franco, senior director of economic indicators at The Conference Board.
"There is 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," she added.
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While a greater share of surveyed Americans said jobs are becoming easier to find, prospects for the labor market's recovery worsened. Roughly one-in-five Americans expects job openings to shrink in the coming months, up from 16.1% in September.
Congress' failure to pass another stimulus package before Election Day likely dragged on sentiments as well, Kathy Bostjancic, chief US financial economist at Oxford Economics, said in a note. Senate Majority Leader Mitch McConnell adjourned the Senate until November 9 on Monday, essentially preventing the body from approving additional fiscal support.
When coupled with rising COVID-19 infection rates, the legislative shortcoming could weigh on confidence through the winter, Bostjancic said.
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