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Economy in Brief

Consumer Confidence Down Sharply
by Tom Moeller October 26, 2004

The Conference Board’s Index of Consumer Confidence fell a sharp 4.0% in October to 92.8. It was the third consecutive monthly decline and was to the lowest level since March. Consensus expectations had been for a reading of 93.5.

During the last twenty years there has been a 50% correlation between consumer confidence and the y/y change in real consumer spending.

The present situation index fell a moderate 1.2% (+40.6% y/y) for the third consecutive down month but the index of consumer expectations fell a sharp 5.8% to 92.0 (+0.5% y/y).

Jobs were viewed as hard to get by fewer survey participants, 27.8% versus 28.0% in September although 18.4% of participants expected fewer jobs in six months, the highest percentage since February.

The Conference Board’s survey isconducted by a mailed questionnaire to 5,000 households and about 3,500 typically respond.

Conference Board Oct Sept Y/Y 2003 2002 2001
Consumer Confidence 92.8 96.7 13.6% 79.8 96.6 106.6
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