INSTANT VIEW: Consumer confidence slumps in October

NEW YORK (Reuters) - U.S. consumer confidence fell to lower-than-expected levels in October, amid growing concerns that job market conditions will worsen in the near term, according to a report released on Tuesday.

KEY POINTS: * The Conference Board, an industry group, said its index of consumer attitudes slipped to 47.7 in October from a revised 53.4 in September, which was originally reported as 53.1. * The index level is the weakest since July, when it stood at 47.4, according to the Conference Board. * The present situation component of the survey dipped to 20.7 in October from 23.0 the prior month -- its lowest reading in 26 years. * More Americans surveyed said jobs were "hard to get" in October, with that gauge rising to 49.6 percent from 47.0 percent in September. Those claiming jobs "plentiful" fell to 3.4 percent from 3.6 percent last month.

COMMENTS:

CARY LEAHEY, ECONOMIST, DECISION ECONOMICS, NEW YORK:

"There was a big reaction in the marketplace because the market did not have a low enough forecast.

"It's an adverse number any way you cut it, but it's overstating any newfound weakness in the labor market and the extent of the slowdown in the third quarter.

"This is yet another number that adds to the paradox of the economic outlook. On Thursday we will get at least a 3 percent gain in third-quarter GDP, but today's report suggests that isn't going to last into the fourth quarter.

"Bonds can rally on signs of softer news going into the fourth quarter while stocks can rally on the good earnings news that came from the upswing in the third quarter.

"It's important to remember that companies made money in the second quarter so they are going to make a lot more money in the third quarter.

"The stock market is reacting to the V recovery in earnings and argues that you do not need a V recovery in economic growth for too long because the break-even point for companies to make a profit is lower.

"This report reminds us that the economic recovery will be soggy at best unless the consumer starts to feel better and spend more.

"Once again, retailers are bracing for a bad Christmas saying, they have their stocks in line for that, but this report highlights the risk they could still be disappointed for the second year in a row."

STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO, GREENWICH, CONNECTICUT:

"The consumer is still not seeing the end of the recession. Employees still feel vulnerable. So you are having a little bit of cross-currents here."

GREG SALVAGGIO, VICE PRESIDENT OF TRADING, TEMPUS CONSULTING, WASHINGTON:

"We're of the mind-set that the euro is a bit overextended. Every single player in the market is long euros, and we're seeing a correction now. Equities are following the same pattern. We think this is the start of a trend. The euro at $1.47 is the next support level and $1.45 is possible in the next few days.

"The consumer data suggests a global recovery isn't as entrenched as we thought it was. That said, though, we still think the Fed is going to hike interest rates in the first quarter just to get rates to a more normal level. If consumer confidence hovers just below 50 and the housing market shows signs of at least stabilizing, then I think you'll get a hike."

KURT BRUNNER, PORTFOLIO MANAGER, SWARTHMORE GROUP, PHILADELPHIA, PENNSYLVANIA:

"It's not a positive number and equity markets are reacting accordingly. I'm still not bearish, but in the near term at least, I think caution will rule the day. Consumers won't have open pocketbooks as we go into the holiday season. Spending levels might be OK, but we won't see impressive spending. It won't be an 'empty the wallet' environment. The employment situation is still bad, so I can see why the consumer would be cautious. The outlook is that, at least now, there's not a whole lot of hiring going on, so consumers have to be nervous about that. That's what impacting confidence."

MARK VITNER, ECONOMIST, WELLS FARGO ADVISORS, CHARLOTTE, NORTH CAROLINA:

"It is a pretty ugly number. We were expecting a lower number but not this low. Expectations had led this thing up, and those expectations were never met. Despite the expectations that things were going to get better, they never did get better. Folks are still very concerned about the present situation. The present situation had been inching up a little bit but it still remained awfully low, and in fact I think we hit a new low on the present situation today -- and that simply reflects the lack of job growth. Layoffs aren't picking up but hiring hasn't picked up."

GARY THAYER, MACROSTRATEGIST, WELLS FARGO ADVISERS, ST. LOUIS, MISSOURI:

"Consumer confidence was weaker than expected in October. Consumers are concerned not only about the future, but also about the current situation. In particular, the percentage of people who thought jobs were plentiful declined again in October and the portion who thought they were hard to get increased. The job situation continues to be a concern for consumers. Confidence is up from where it was earlier this year but we are not seeing the job market improve enough to boost confidence further. We need to see more job creation to lift confidence to more healthy levels."

MARKET REACTION: STOCKS: U.S. stock indexes fell into negative territory. BONDS: U.S. Treasury debt prices added to gains. DOLLAR: U.S. dollar rose against the euro.