For the second consecutive month, the Conference Board's consumer confidence index fell in October. The index now stands at 85.0 (1985=100), down from 87.5 in September. Economists generally had been looking for a slight increase in consumer confidence this month.
"Much of the decline in confidence over the past two months can be attributed to the recent hurricanes, [gasoline price] pump shock and a weakening labor market," says Lynn Franco, director of the Consumer Research Center at the Conference Board, a New York-based business research group.
She notes that consumers' assessments of current economic conditions are higher than the Conference Board's figures for last year at this time -- although their economic expectations now are lower than they were then. "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," Franco says.
Consumer confidence is a closely watched economic indicator since consumer spending accounts for about two-thirds of all U.S. economic activity.