Consumer spending, Economy

Consumer confidence plummets to lowest in seven months

320px-Cash_RegistersU.S. consumer confidence fell this month to 70.4, the lowest level in seven months, amid hiring and pay concerns—the drop comes after a plunge in consumer confidence resulting from the 16-day partial government shutdown.

The declines for both September and October were driven in part by a decrease in hiring and economic expectations for the next six months, as well as concerns surrounding the implementation of the Obama Administration’s healthcare reform, San Jose Mercury News reports.

“Disgust with politicians and government policy is what’s holding back expectations,” Ted Wieseman, an economist at Morgan Stanley, said, according to San Jose Mercury News.

Despite the sharp decline in October, consumers spent 0.4 percent more at retail stores and restaurants than in the previous month, with auto sales accounting for approximately half of the gain.

Restaurants, furniture retailers, electronic stores and clothing retailers also saw an increase in sales, while sales at grocery and department stores increased only slightly, San Jose Mercury News reports.

Between August and October, employers added an average 202,000 jobs—up from just 146,000 between May and July. Gas prices have also declined for nine consecutive weeks to the lowest level in nearly two years, before they edged up slightly in the past few weeks.

The economy grew at a rate of 2.8 percent between July and September, though most economists expect growth to slow down to two percent or less in the fourth quarter, according to San Jose Mercury News.

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