October 29, 2010 / 1:58 PM / 9 years ago

Consumer sentiment dips to lowest since November

NEW YORK (Reuters) - U.S. consumer sentiment worsened more than expected in October, hitting its weakest level since November, with concern about the economy high leading into next week’s election, a survey showed on Friday.

A man shops at an Office Depot store in New York October 25, 2010. REUTERS/Shannon Stapleton

The Thomson Reuters/University of Michigan’s final October reading on the overall index on consumer sentiment came in at 67.7, down from 68.2 in September and below the 68.0 median forecast among economists polled by Reuters.

Tuesday’s congressional elections are expected to result in losses for the Democratic Party, at least partly because of high unemployment and consumers’ views on how Democratic President Barack Obama is handling the economy.

Earlier this month, the survey showed consumers’ assessments of government economic policies fell to the lowest level since Obama took office.

“Residents of nearly all local areas expressed economic discontent. It would not be surprising for consumer confidence to rebound following the election; it would be surprising if those gains proved to be more than temporary,” the survey’s director, Richard Curtin, said in Friday’s report.

Consumer spending typically accounts for about two-thirds of U.S. economic activity and is considered critical to the recovery.

The survey’s barometer of current economic conditions declined to 76.6 in October from 79.6 in September. It was forecast by economists to come in at 73.5.

The survey’s gauge of consumer expectations edged up to 61.9, above last month’s 60.9 reading but below a forecast of 65.

The survey’s measure on consumers’ 12-month economic outlook rose to 67 compared with 61 in September, but the measure on their five-year outlook declined to 70 from 73 in September.

At the same time, the one-year inflation expectations measure rose to 2.7 percent from 2.2 percent in September, and the five-to-10-year inflation outlook index inched up to 2.8 percent from 2.7 percent in September.

Reporting by Caroline Valetkevitch, Editing by Chizu Nomiyama

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