Consumers still pessimistic despite stock market gains
NEW YORK » Americans’ confidence in the economy stayed stuck in gloomy territory in October, with Wall Street’s gains in recent months not boosting spirits much.
Coaxing shoppers out of their shells will be the major challenge for retailers heading into the holiday season. That could mean they’ll be continuing to push big discounts.
The confidence report, released yesterday by the Conference Board, comes in the face of a rebounding stock market. But many shoppers, grappling with weak job prospects and a renewed slide in home prices, see their personal financial health tied more to Main Street, not Wall Street. Another report, released yesterday from a key home pricing index, showed home prices are weakening across the country.
"The things that matter most to consumers are either not improving or worsening," said Mark Vitner, an economist at Wells Fargo.
The Conference Board, a private research group, said its Consumer Confidence Index rose to 50.2 from a revised 48.6 in September. Economists surveyed by Thomson Reuters expected 49.2. September’s reading was the index’s lowest point since February.
The index, which measures how Americans feel about business conditions, the job market and the next six months, has recovered only fitfully since hitting an all-time low of 25.3 in February 2009.
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The Dow Jones industrial average rose 5.41 to 11,169.46 yesterday to its highest close since late April. The Dow is up 7.1 percent for the year.
But while the stock market has been on an upward path, confidence has been moving sideways. In October 2009 the index stood at 48.7. Since then it has mostly hovered in a tight range between the mid-40s and the high 50s. May 2010 proved to be the only exception at 62.7, but even that is weak.
One component of the index, which measures how shoppers feel about the economy right now and is most closely correlated with consumer spending, is actually even lower than it was two years ago heading into the presidential election. The measure increased slightly to 23.9 in October from 23.3. Back in October 2008 it was 43.5.
