RISMEDIA, November 1, 2010—(MCT)—Consumer confidence rose in October, though it remains near historically low levels, with a monthly gauge compiled by the Conference Board increasing to 50.2.
“Consumers’ assessment of the current state of the economy is relatively unchanged, primarily because labor market conditions have yet to significantly improve,” said Lynn Franco, director of the Conference Board’s consumer research center.
Although economists declared that the recession officially ended last year, the nation’s employment market remains weak. Earlier this month, the government reported that nonfarm payrolls fell 95,000 during September, while private-sector payrolls gained a modest 64,000.
Economists polled by MarketWatch had expected a confidence reading of 50 for October.
The Conference Board’s index helps analysts compare fluctuations in confidence, with a reading of 100 for the base year of 1985. Generally when the economy is growing at a good clip, confidence readings are at 90 and above.
Confidence for September was revised to 48.6, from a prior estimate of 48.5.
“However, you look at the numbers, confidence is very depressed, and it has a long way to go to return to anything like normal levels,” wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics, in a research note.
October’s increase may not reflect a fundamental improvement, according to Barclays. “Confidence has largely trended sideways over the past few months. We do not expect the series to be boosted significantly in the near term, as the unemployment rate remains stubbornly high and many households continue to struggle financially,” Barclays analysts wrote in a research note.
A barometer on consumers’ expectations increased to 67.8 in October from 65.5 in September. The portion of those expecting business conditions to be “better” in six months rose to 16% in October from 15% in September, but a clear majority of consumers—almost 70%—expect conditions to be the “same.”
Meanwhile, consumers’ assessment of the present situation rose to 23.9 from 23.3. The percentage of consumers saying business conditions are “bad” fell to 41.9% in October from 46% in September, with almost half of respondents—49.6%—telling the Conference Board that they believe conditions are “normal.”
When it comes to their buying plans, 5% of consumers said they have plans to buy an automobile within six months, the same as in the prior month. The percentage of those with plans to buy a home rose to 2.1% from 2%, but those with plans to buy major appliances fell to 24.2% from 27.7%.
(c) 2010, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.