American consumers are feeling increasingly less confident these days as fears of an oncoming recession remain elevated.
The Conference Board, a business research group, said Tuesday that its consumer confidence index fell to 102.6, down from 104.3 in September.
The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.
The index measuring Americans short-term outlook for income, business and job market declined again, to 75.6 in October from 76.4 in September. Readings below 80 for future expectations historically signal a recession within a year.
“The continued skepticism about the future is notable given U.S. consumers—at least through the third quarter of this year—continued to spend heavily on both goods and services,” said Dana Peterson, chief economist at The Conference Board.
Spending by consumers rose by a brisk 0.4% in September—even after adjusting for inflation and even as Americans face ever-higher borrowing costs. However, economists warn that such strong spending isn’t likely to continue in the coming months, which would be bad news for businesses as the holiday shopping season ramps up.
Consumer spending accounts for around 70% of U.S. economic activity, so economists pay close attention to the mood of consumers to gauge how it may affect the broader economy.
Though they continue to spend, inflation and geopolitical conflicts remain at the forefront of American consumers’ minds.
Confidence improved late in the spring as inflation eased in the face of 11 interest-rate hikes by the Federal Reserve. But the recent downturn reflects consumer anxiety over spending on non-essential goods, particularly if they have to put it on a high-interest rate credit card.
Consumers’ view of current conditions also fell this month, to 143.1 from 146.2 in September.