US consumer confidence weakens for third month

WASHINGTON, United States (AFP) – US consumer confidence fell for a third straight month in October with Americans concerned about rising costs and elevated interest rates, while worries over war also increased, said survey data released Tuesday.

The consumer confidence index slipped this month to 102.6 from a revised 104.3 figure in September, said The Conference Board, though the number was slightly above analyst expectations.

"Consumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular," said The Conference Board's chief economist Dana Peterson.

Besides concerns over the political situation and higher interest rates, worries around war and conflicts increased as well on the back of turmoil in the Middle East, Peterson added in a statement.

The decline in confidence, seen across those aged 35 and above, was not limited to any one income group, the report said.

Although there were less optimistic views on business conditions, consumers were steady in their views on current job availability.

"Expectations for the next six months stayed below the recession threshold of 80, reflecting a decline in confidence about future business conditions, job availability, and incomes," said Peterson.

This comes despite robust spending on goods and services in recent months – with consumer resilience helping to boost US economic growth in the third quarter. The slide in consumer confidence for three straight months was "thanks largely to the rise in gas prices and decline in stock prices," said Kieran Clancy, senior US economist at Pantheon Macroeconomics.

"Gas prices are now falling, however, so consumers' confidence should rebound in the months ahead, unless the stock market suddenly lurches lower," he added.

Clancy also noted that the data now signals resilient spending growth in the fourth quarter, although less than the jump seen in the July to September period.

Consumers were less inclined to buy a house or car in October, given the surge in mortgage and auto loan rates, said Nationwide senior economist Ben Ayers.

"We expect a sharp slowdown in consumer activity to end 2023, reducing real GDP growth from the blowout reading for the third quarter," he added in a note.