By Utta Von Nuremburg
WASHINGTON (MNI) – The Conference Board’s Consumer Confidence
Index, to be released Tuesday morning, is expected to see some modest
improvement while remaining below levels that would indicate U.S.
consumers believe the economy is taking a major turn for the better.
The consumer confidence index is forecasted to rise to 50,
according to a survey of economists by Market News International.
David Resler, chief economist at Nomura Securities, said, “Consumer
attitudes have remained gloomy. Although an improvement from September,
October’s anticipated rise isn’t much of an overall improvement.”
He added that the numbers need to come in between 70 and 80, which
would indicate that consumers become confident the economy is making
some “serious turns.”
Despite expectations for a modest improvement in tomorrow’s data,
consumers’ outlook in September took a turn for the worse after
improving in August. The Index retreated to 48.5, following a reading of
53.2 in August. The percentage of consumers expecting business
conditions will worsen over the next six months rose to 16.4%, while
those anticipating business conditions will improve declined to 14.9%.
Often considered a better predictor of household spending, the
University of Michigan Consumer Sentiment Index preliminary report for
October unexpectedly fell to 67.9 — its lowest level since July —
after September’s final reading of 68.2. This likely indicates that
consumers remain uncertain about the strength and stability of the
economic recovery.
However, one bright spot in September was retail sales data, which
showed overall sales rose 0.6%, more than expected and following an
adjusted 0.7% increase the month prior.
The increase was led by gains in sales of a range of products, such
as motor vehicles, electronics and appliance stores.
On an annualized basis, September’s U.S. auto sales climbed to
11.73 million from 11.46 million prior — the fastest pace since March
— as consumers slowly returned to showrooms while remaining concerned
about job security and uncertain over future income prospects.
–Utta Von Nuremburg is a reporter for Need To Know News in Washington
** Market News International Washington Bureau: 202-371-2121 **
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