ECON: Consumer Confidence Sapped by Shutdown
- Confidence 71.2 vs 75.0 Forecast, 79.7 previously
- Present Situation 70.7 vs 73.5 previously
- Expectations 71.5 vs 84.7 previously
- Jobs 'hard to get' 35.8 vs 33.6 previously
Market Reaction: Markets were well within their right to expect the first of the October data to reflect the shutdown, especially when it comes to what we'd expect to be one of the more correlated data sets, but the right wasn't exercised enough! Biggest volume of the day in Treasury Futures and bond markets bouncing back. Until tomorrow's ADP, the employment component of this Confidence data is one of the best early indicators we have of next week's NFP. The 35.8 reading vs 33.6 means respondents said jobs were harder to get in October.
The Conference Board Consumer Confidence Index®, which had declined moderately in September, decreased sharply in October. The Index now stands at 71.2 (1985=100), down from 80.2 in September. The Present Situation Index decreased to 70.7 from 73.5. The Expectations Index fell to 71.5 from 84.7 last month.
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was October 17.
Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers’ expectations. Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996. However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months.”