–Confidence in Current Conditions Improves, Expectations Down
By Kevin Kastner
WASHINGTON (MaceNews) – The Conference Board’s U.S. consumer confidence index fell to a reading of 100.9 in October from a downward revised 101.3 reading in September.
The Conference Board Tuesday noted that most consumers see little improvement in the economy through the end of the year as COVID cases are again on the rise.
Analysts had expected the October index to rise to 102.0 from the originally reported 101.8 reading in September. The index was at 132.6 in February before the state shutdowns began.
The reading of present situation reading rose to 104.6 in October from 98.9 in September while the expectations reading fell to 98.4 from 102.9.
““Consumers’ assessment of current conditions improved while expectations declined, driven primarily by a softening in the short-term outlook for jobs,” said Lynn Franco, the Conference Board’s Senior Director of Economic Indicators.
“There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with COVID-19 cases on the rise and unemployment still high,” she added.
However, current conditions were seen more favorably than in September.
The percentage of respondents describing current business conditions as “good” slipped to 17.5% from 17.6% in September, while those reporting they were “bad” fell to 33.9% from 37.0%.
Those reporting jobs as “plentiful” rose to 26.5% from 23.6%, while those reporting that they are “hard to get” fell to 19.9% from 20.3%. As a result, the gap between the two jobs measures, a closely watched indicator of employment conditions, improved to +6.6 in October from +3.3 in September. This measure was +36.1 a year ago.
Respondents looking for business conditions to improve over the next six months fell to 36.3% from 36.7%, compared with 17.0% who expect conditions to worsen, up from 15.8%.
Those expecting more jobs in the coming months rose to 33.2% from 32.9% in September, but those looking for fewer jobs rose to 20.2% from 16.1%.
Released at the same time, the Richmond Fed’s manufacturing index rose to a series high reading of 29 in October from 21 in September, in line with other regional manufacturing data already released. There were gains in shipments and new orders, while the employment index was unchanged at 23, indicating significant expansion.
The services data from the Richmond Fed also pointed to expansion, with the services revenue measure moving up to 19 from 6 in September. The data suggested significant improvement in employment as well.
Released later in the morning, the Dallas Fed reported that its services index rose to 13.2 in October from 11.5 in September despite declines in the readings for revenue, employment, and retail sales. The region was particularly hard hit by weather events over the last several months.
The regional manufacturing and service readings suggesting improvements in the national ISM measures to be released next week.
Regional Conditions Surveys (sources as stated)
In other data released earlier Tuesday, durable goods orders rose by 1.9% in September and were still up 0.8% when a 4.1% rebound in the transportation component was excluded.
One key factor was a turnaround in the nondefense aircraft orders sector, where new orders exceeded cancellations after negative readings in the previous two months.
The durable goods data point to solid demand for most categories, with nondefense capital goods orders and shipments up sharply both including and excluding aircraft. This continued a recent trend that will be reflected in Thursday’s third quarter GDP report.
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Contact this reporter: kevin@macenews.com.
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