Consumer confidence unexpectedly slumped in October to the lowest level since March 2009, when the U.S. economy was in a recession, as Americans’ outlooks for employment and incomes soured.
The Conference Board’s sentiment index decreased to 39.8 from a revised 46.4 reading in September, figures from the New York-based private research group showed today. This month’s reading was less than the most pessimistic forecast in a Bloomberg News survey in which the median projection was 46.
Limited job availability, deteriorating home values and the threat of a European debt default are weighing on sentiment. A drop in optimism helps explain concern among some companies like Levi Strauss & Co. that spending will be restrained during the holiday shopping season.
“The outlook continues to deteriorate,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York. “This is not good for the holidays, which won’t be horrible but will definitely be worse than last year.”
Estimates in the Bloomberg survey of 76 economists ranged from 42.5 to 52. The index averaged 53.7 during the 18-month recession that ended in June 2009.
