NEW YORK (AP) — Worries about job prospects sent consumer
confidence to a seven-month low in October and its third
consecutive monthly decline. The steeper-than-expected drop raised
questions about whether consumers will be in the mood to spend
during the critical holiday shopping season.

The Consumer Confidence Index dropped 3.9 points to 92.8, down
from a revised 96.7 in September, according to a report yesterday
from The Conference Board, a private research group. Analysts had
expected a reading of 94.

The October figure is the lowest since March, when the reading
was 88.5. The index had been rising since April, before falling
three points to 98.7 in August and another two points in
September.

“Subdued expectations, as opposed to eroding present-day
conditions, were the major cause behind October’s decline in
consumer confidence,” said Lynn Franco, director of The
Conference Board’s Consumer Research Center. “And,
while consumers’ assessment of the labor market this month
showed a moderate improvement, the gain was not sufficient to ease
concerns about job growth in the months ahead.”

Economists closely track consumer confidence because consumer
spending accounts for two-thirds of all U.S. economic activity.

The Expectations Index, one component of the Index that measures
consumers’ outlook over the next six months, declined to 92.0
from 97.7. Meanwhile, the Present Situation index dipped to 94.2
from 95.3.

The Conference Board’s gauges are derived from responses
received through Oct. 19 to a survey mailed to 5,000 households in
a consumer research panel. The figures released yesterday include
responses from at least 2,500 households. The figures for September
were revised after all the surveys for that month were
tabulated.

Michael Niemira, chief economist at the International Council of
Shopping Centers, said it is unclear whether the decline shows a
“real deterioration” in confidence or was a political
statement in advance of next week’s presidential
election.

Deteriorating job expectations “could be tied to a vision
of what the economy might be six months down the road, shaped by
how effective Senator Kerry’s message is — whether you
agree or not,” he said. Democrat John Kerry is challenging
President Bush.

In that case, he said the report would be less worrisome for the
holiday season or for the overall economy.

But if the decline in consumer confidence is indicative of a
“real deterioration,” than it is a troubling sign for
the holiday season, he said.

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