The Consumer Reports Sentiment Index remained weak in October, dropping minimally to 47.6 from 48.8 the month before—but showed some glimmers of hope for the economy.
In particular, the indicators tracking recent and planned spending rebounded to 11.3 after hitting a 10-month low of 10.0 in September. Consumers bought a number of high-ticket items in early October, including major appliances and home electronics.
Also of note, the Consumer Reports Sentiment Index, at 47.6, is up from 44.8 a year ago, and the Consumer Reports Stress Index fell to 58.2 from 60.2 in September.
“As we approach the shoulder of the holiday season, there is some positive movement in retail,” said Ed Farrell, director of the Consumer Reports National Research Center. “However, a strong holiday season will depend on consumers having clear signs that the economy is on the mend, which to this point has been lacking. Weak employment, financial difficulties and poor confidence overall continue to present a powerful headwind for holiday sales.”
Regionally, the biggest drop was in the Northeast. After spending August and September in positive territory, the index for the Northeast fell 11.3 points to 39.0.
The Consumer Reports Employment Index improved slightly to 50.2 on the news that the past 30-day job gains outpaced job losses. This was the first time this index moved into positive territory since July. However, the Consumer Reports Trouble Tracker rose to 49.7 from 45.3 the previous month.
“This month, the Consumer Reports Trouble Tracker showed that in most regions of the country, financial troubles are on the rise,” Farrell added. “Even though we see the overall rate of employment improving, households that earn less than $50,000 a year are struggling to pay bills and find new jobs.”