US Consumer Confidence Falls to 11 Month Low

Consumer confidence unexpectedly fell to a one-year low in October as Americans soured on the outlook for the economy amid a contentious presidential election campaign.

The University of Michigan preliminary index of sentiment declined to 87.9 from 91.2 in September, according to a report Friday. That was weaker than the lowest estimate in a Bloomberg survey of economists. Long-term inflation expectations declined to a record low.

A sustained acceleration in worker pay has remained elusive even as companies keep adding jobs at a solid pace, and political uncertainty may be restraining confidence. At the same time, still-cheap fuel costs and improving employment prospects will help underpin consumer spending, which accounts for about 70 percent of the economy.

“It is likely that the uncertainty surrounding the presidential election had a negative impact, especially on low-income consumers, and without that added uncertainty, the confidence measures may not have weakened,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.

Even so, the margin of consumers expecting Democrat Hillary Clinton to win the election widened in October to a 46 percentage-point gap, from 34 points in September.

via Bloomberg

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza