Consumer confidence eroded more than originally estimated in October, according to the University of Michigan and Thomson Reuters. The preliminary figure for the Consumer Sentiment Survey’s index, announced a couple weeks ago, was 75.2 in October, down from 77.5 in September. The final data, however, suggest that sentiment fell further than that, with the index revised to 73.2 in October. This suggests that after peaking at a six-year high in July (85.1), consumer confidence is now at its lowest point since December, when Americans were anxious about going over the fiscal cliff. As such, it means that all of the gains in confidence earned over the course of this year have been erased.
With that said, the decline is probably temporary and the result of the federal government shutdown and debate over raising the nation’s debt ceiling. Now that the budget impasse has ended – at least for now – confidence should begin to improve.
Chad Moutray is the chief economist, National Association of Manufacturers.