Consumer confidence in the economy fell in October to its lowest level in about nine years. A weak labor market, threat of military action in Iraq, and a prolonged decline in the financial markets were blamed for the drop.
The Conference Board's Consumer Confidence Index dropped to 79.4, down from 93.7 in September. It was the fourth straight month the index has declined.
The last time the index was lower was November 1993, when it stood at 71.9.
"A weak labor market, the threat of military action in Iraq, and a prolonged decline in the financial markets have clearly dampened both consumers' confidence and their expectations for the near future," says Lynn Franco, director of The Conference Board's Consumer Research Center. "The outlook for the holiday retail season is now fairly bleak. Without the likelihood of a pickup in consumer spending, an already weak economic recovery could weaken further."
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.
Respondents rating current business conditions as "bad" increased to 27.6 percent from 23.8 percent in September. Those rating current conditions as "good" decreased to 15.6 percent from 18.5 percent.
The respondents expecting a deterioration in business conditions in the next six months rose to 14.1 percent from 9.7 percent. Consumers expecting conditions to improve declined to 19 percent from 21.6 percent.