The numbers: A survey of consumer confidence fell in October to 102.5 to mark the first decline in three months, reflecting nagging worries about high inflation and the rising odds of recession.
The closely followed index declined from 107.8 in September, the nonprofit Conference Board said Tuesday.
Economists polled by The Wall Street Journal had forecast the index to fall to 106.3.
Consumer confidence tends to signal whether the economy is getting better or worse. The index has fallen sharply in the past year because of soaring inflation and now it’s flashing warning signs about recession.
Big picture: The U.S. economy is growing but slowing and a recession could be on the horizon if the Federal Reserve keeps raising interest rates to try to suffocate inflation. Consumers are feeling more anxious about the near future.
Key details: A measure of how consumers feel about the economy right now dropped to 138.9 in October from 150.2 in the prior month.
Gas prices are rising again after falling during the summer and high food prices are also a concern for Americans, the survey found.
A similar confidence gauge that looks ahead six months slid to 78.1 to from 79.5.
“The expectations index is still lingering below a reading of 80 — a level associated with recession — suggesting recession risks appear to be rising,” said Lynn Franco, senior director of economic indicators at the board.
Looking ahead: “Consumer confidence is a proxy for inflation now, particularly prices at the pump,” said corporate economist Robert Frick of Navy Federal Credit Union. “Confidence improved as gas prices fell in August and September, and now declined as gas prices are rising.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
rose again in Tuesday trades.
