Publication Date:
Sun, 2000-11-05 18:00
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The Conference Board's Consumer Confidence Index (CCI) fell by 5.1% between September and October, after rising by 1.2% the month before. With a October reading of 135.2 on the Conference Board's scale where average confidence during the year 1985 is equal to an index level of 100, the composite CCI was still 3.6% higher than during the same month of 1999.
Consumer's assessment of current economic conditions declined 3.0% over the latest month, but was 1.8% higher during October 2000 than in October of last year. The CCI component measuring expectations for the future (defined as 6 months out in this survey) fell by a much steeper 7.3% between this September and October. Despite the decline, this forward-looking component of the index remained a solid 5.8% higher this October than during October 1999.
The CCI's for six of the nation's nine regions recorded decreases between September and October. Consumers in the Rocky Mountain states were the most upbeat in the nation this October. Confidence readings in the South Atlantic, East North Central, and Pacific Coast states were also markedly higher than the national average level this October. As has been the case for most of the past half-decade, the confidence reading for consumers in the Middle Atlantic states (New York, New Jersey, and Pennsylvania) was the lowest in the nation (about 9% below the national average) during October2000.
Over-the-month gains in confidence of more than 1% were registered in the Rocky Mountain (+1.7% between September and October) and Pacific Coast (+1.2%) states. However, confidence dropped by 4% or more in three regions - the West South Central (-9.9%), West North Central (-7.0%), and Middle Atlantic (-4.7%).
Between October 1999 and this October, by far the sharpest improvement in consumer confidence was recorded in the Rocky Mountain states. Last October consumer confidence in this region was the second- lowest of the nine regions of the nation, but following a 16.2% over-the-year gain the October 2000 confidence index made Rocky Mountain state consumers the most upbeat in the nation. Seven of the country's nine regions saw confidence levels increase between October 1999 and this October. The strongest improvement has come in the West and the East, with consumers in the South and in the Midwest only marginally more or less confident this fall than during the fall of 1999.
The Conference Board attributed the sharp drop in the October consumer confidence reading to a number of factors, including: concern about the cooling growth rate of the U.S. economy, apprehension regarding energy prices, and the recent volatility in financial markets. A significantly smaller percentage of consumers surveyed in October than in September anticipated an increase in their income during the next six months, and a smaller share regarded future employment and business conditions to be "favorable". Although still high from a longer historical perspective, the October consumer confidence index reading was the lowest recorded so far during 2000, and an unmistakable sign that consumer spending growth will likely slow markedly over the final two months of this year and into the spring of 2001.
Also See:
Building Materials Price Inflation - September
Housing Starts - September
New Residential Building Permits by Region - September
Recent Trends in New Residential Permits for 1999''s Top 25 Metro Areas
