Consumer confidence tumbles

NEW YORK – Worries about job prospects sent consumer confidence to a seven-month low in October and its third consecutive monthly decline. The steeper-than-expected drop raised questions about whether consumers will be in the mood to spend during the critical holiday shopping season.

The Consumer Confidence Index dropped 3.9 points to 92.8, down from a revised 96.7 in September, according to a report Tuesday from The Conference Board, a private research group. Analysts had expected a reading of 94.

The October figure is the lowest since March, when the reading was 88.5.

The index had been rising since April, before falling 3 points to 98.7 in August and another 2 points in September.

“Subdued expectations, as opposed to eroding present-day conditions, were the major cause behind October’s decline in consumer confidence,” said Lynn Franco, director of The Conference Board’s Consumer Research Center.

“And, while consumers’ assessment of the labor market this month showed a moderate improvement, the gain was not sufficient to ease concerns about job growth in the months ahead.”

Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity.

The Expectations Index, one component of the Index that measures consumers’ outlook over the next six months, declined to 92.0 from 97.7. Meanwhile, The Present Situation index dipped to 94.2 from 95.3.

The Conference Board’s gauges are derived from responses received through Oct. 19 to a survey mailed to 5,000 households in a consumer research panel. The figures released Tuesday include responses from at least 2,500 households.

The figures for September were revised after all the surveys for that month were tabulated.

Michael P. Niemira, chief economist at the International Council of Shopping Centers, said it is unclear whether the decline shows a “real deterioration” in confidence or was a political statement in advance of next week’s presidential election.

Deteriorating job expectations “could be tied to a vision of what the economy might be six months down the road, shaped by how effective Senator Kerry’s message is – whether you agree or not,” he said.