NEW YORK – Stagnant job growth and steep stock market losses pushed U.S. consumer sentiment to its lowest level in nine years in October, raising some concerns that the consumer-driven recovery could soon be at risk.
The University of Michigan's final October consumer sentiment index fell to 80.6 from 86.1 in September, market sources said Friday. That was lower than forecasts for a reading of 81.1 and up only a sliver from the preliminary reading for October of 80.4 released two weeks ago.
The drop was led by a steep fall in the expectations index, which tracks attitudes about the 12 months ahead, to 73.1 from 79.9. That was a bit higher than the preliminary reading of 72.4. The current conditions index, which correlates more closely with spending, fell to a nine-year low of 92.4 in October from 95.8. The preliminary reading was 92.9.
Consumer spending, which drives about two-thirds of the U.S. economy, so far has remained robust, in part due to the lowest interest rates and mortgage rates in more than a generation seen during the month.
The University of Michigan preliminary consumer sentiment survey is based on telephone interviews with about 500 Americans across the country on personal finances and business and buying conditions. The data is released directly to subscribers only and are obtained through market sources.