Confidence Down For October

New York — Hit by hurricanes, gas prices and a softer job market, consumer confidence unexpectedly fell in October for a second straight month, declining 2.9 percent to a reading of 85, down from 87.5 in September.

The key barometer of consumer sentiment — and future consumer spending — has now fallen 19.4 percent during the past two months, from a 13-month high of 105.5 set in August, to its lowest level in more than a year.

The Conference Board said the plunging numbers could indicate that consumers will curtail their Christmas shopping, putting retailer profits under pressure during the holiday season.

“This degree of pessimism, in conjunction with the anticipation of much higher home heating bills this winter, may take some cheer out of the upcoming holiday season,” said Lynn Franco, director of The Conference Board's Consumer Research Center. “In order to avoid a blue Christmas, retailers will need to lure shoppers with sales and discounts.”

Much of the decline in confidence over the past two months, said Franco, “can be attributed to the recent hurricanes, pump shock and a weakening labor market.”

Consumers still feel OK about current conditions, but are growing increasingly apprehensive about the near-term future, said Franco. Consumers' assessment of current conditions, said Franco, “remains above readings a year ago, but their short-term expectations are significantly below last October's level.”