NEW YORK, N.Y. (10/30/13)--A key measure of consumer confidence fell to record lows in the wake of the government shutdown and debt-ceiling negotiations.
The Conference Board, a New York-based research firm, released data on Tuesday showing its consumer confidence index fell in October to 71.2, down from a revised 80.2 in September.
The index was measured at its lowest level in six months after taking its biggest month-to-month plunge since August 2011 (Bloomberg.com Oct. 29).
The decline was also more severe than analysts expected. A median forecast of economists polled by Bloomberg predicted that the measure would only fall to 75.
Consumers' sour mood isn't expected to improve anytime soon, the Confidence Board said, citing the temporary nature of the agreement passed by Congress on Oct. 16 (MarketWatch Oct. 29). Another round of negotiations is set to take place in January and February, when, respectively, the government will run out of money and a debt-ceiling breach is expected.
While a component of the index measuring consumers' views of the present economic situation fell to 70.7 from 73.5 this month, a measurement of their expectations dropped to 71.5 from 84.7--the lowest that expectations have been since March (Moody's Economy.com Oct. 29).
The Conference Board consumer confidence index takes into account both consumers' view of current conditions and their expectations of future well-being.