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First Cut: October Consumer Confidence Index little changed from September

The Conference Board’s Consumer Confidence Index was little changed at 125.9 in October after 126.3 (previously 125.1). On balanced, consumers were slightly more confident about present conditions than they were in the prior month with the component at 172.3 after 170.6. The near-term outlook declined somewhat to 94.9 after 96.8. Consumers have given back some of the gains in confidence seen in July and August and have settled into a more moderate level of optimism that is still quite respectable in the historical context.

As has been the case for some time, it is solid labor market conditions that have kept consumers’ feelings quite positive about the economy. Perceptions of jobs plentiful firmed to 46.9 in October from 44.5 in September, while the reading for jobs hard to get remained low at 11.8 after 11.0. Expectations for the labor market were less optimistic for six months from now with a reading at 16.9 after 17.6 for more jobs while those expecting fewer jobs rose to 17.8 after 15.4. On the plus side, anticipation of increased incomes was up in October to 21.1 after 19.7 in September. If this is below the peaks in July and August it is consistent with modest gains for incomes.  Expectations that income would decrease were low and flat at 6.5 in October.

Perceptions that business conditions are good at present were higher at 39.2 in October from 37.4 in September and in line with most of 2019 to-date. Expectations that business conditions would improve in six months declined for third month in a row at 18.6 in October from 20.0 in September. This could mean that consumers are warier about the economy. However, these are not bad readings and only suggest expectations of a modest expansion, not the heated conditions seen in 2017 and 2018.

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