By Christopher S. RugaberAP Business WriterWASHINGTON (AP) ó A private research group said Tuesday that consumer confidence in the U.S. economy plunged in October to its lowest on record, as stock markets dropped sharply and companies laid off workers.
The Conference Board said the consumer confidence index fell to 38, down from a revised 61.4 in September and significantly below analysts’ expectations of 52.
That’s the lowest level for the index since the Conference Board began tracking consumer sentiment in 1967, and the third-steepest drop.
“Consumers are extremely pessimistic,” said Lynn Franco, director of the Conference Board’s Consumer Research Center. “This news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season.”
A year ago, the index stood at 95.2.
The 23.4-point drop in the index from September to October is the steepest since it fell 36.9 points from October 1973 to December 1973, when the economy was in the throes of a severe recession. Then, the index was measured every two months. The index dropped 24.3 points from December 1969 to February 1970, Franco said.
Consumer sentiment is closely watched because consumer spending powers about 70 percent of economic activity.