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Consumer Confidence Drops Again - Economy Roundup

Created: On October 31, 2007 @ 2:36 pm In

By Jim Perez,
DebtHelp, Inc. Staff Writer

U.S. consumers are getting even more leery of the economy, as consumer confidence dropped in October for the third straight month.

The Consumer Confidence Index, based on a sample of 5,000 U.S. households, dropped to 95.6, down from September’s 99.5. The index hasn’t hit these depths since October 2005, when it sank to 85.2.

Adding more woes to the economy as the Federal Reserve meets to discuss a possible rate cut, Standard and Poor’s Case-Shiller survey showed home prices in 20 major U.S. metropolitan areas fell 4.4 percent from August 2006 through August 2007, the steepest drop since 2001, when the survey began. The survey is considered more accurate than comparable government reports and offers investors more evidence that the housing sector is sinking to depths not seen since the early 1990s.

In its Consumer Confidence Index survey, The Conference Board Consumer Research Center reported that the percentage of consumers surveyed in October who said present conditions are “good” sank to 23.4 percent from 25.7 a month ago; the percentage who called conditions “bad” dropped to 16.3 percent from September’s 17.8 percent.

Consumers were even less upbeat about the job market, with 22.6 percent of respondents saying jobs are “hard to get,” up from 22.4 percent in September. People who said jobs are “plentiful” in October decreased to 24.1 percent from September’s 25.6 percent.

The percent of consumers expecting more jobs in the upcoming months remained at 13.5 percent in October, while those anticipating fewer jobs increased to 20.1 percent in October, from 18.7 percent in September. The proportion of consumers expecting their incomes to increase in the months ahead declined to 19.6 percent from 20 percent.

And as retailers gear up for the Christmas shopping season, consumers appear to be ready to scale back for the next six months.
The Present Situation Index, which measures how shoppers feel now about the economy, declined to 118.8 in October from 121.2 in September. The Expectations Index, which measures shoppers’ outlook over the next six months, declined to 80.1 from 85.0.

October’s Consumer Confidence numbers show 13.8 percent of consumers are expecting business conditions to worsen through April 2008, up from 11.9 percent in September. The number of people who think business conditions will improve declined to 13.7 percent from September’s 15.7 percent.

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