The government shutdown gave consumers quite the fright, according to the Conference Board's October Consumer Confidence Index released today.
After a slight decline for September, the index fell 11.2% to 71.2 for October, significantly lower than analysts' expectations of a 75.0 reading. The index uses 1985 as its 100-point benchmark.
"Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers' expectations," said Conference Board Director of Economic Indicators Lynn Franco in a statement today. "Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996. However, given the temporary nature of the current resolution, confidence is likely to remain volatile for the next several months."
The index is comprised of responses from a random sample of consumers. In this latest report, consumer sentiment on current conditions fell moderately, while future expectations dropped sharply.
Respondents answering that business conditions are "good" fell 1.7 percentage points to 19%, but those claiming conditions are "bad" also fell 0.9 points to 23%.
Looking ahead, just 16% of those surveyed expect business conditions to improve over the next six months, compared to 20.6% in September's report. At the same time, 17.5% of respondents are anticipating tougher times to come, compared to just 10.3% the previous month.