The Conference Board’s Consumer Confidence Index® declined in October to 102.6 (1985=100), down moderately from September’s upwardly revised 104.3. This marks the second-lowest reading of 2023. The Present Situation Index, which is based on consumers’ sentiment toward current business conditions and the labor market, dropped to 143.1 from 146.2. The Expectations Index, based on consumers’ six-month outlook for income, business, and labor market conditions also moved down to 75.6 from an upwardly revised 76.4 the previous month. “Consumer confidence fell again in October 2023, marking three consecutive months of decline,” said Dana Peterson, Chief Economist at The Conference Board. “October’s retreat reflected pullbacks in both the Present Situation and Expectations Index. Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular. Consumers also expressed concerns about the political situation and higher interest rates.” A majority of consumers surveyed in October perceived that a recession was ‘somewhat’ or ‘very likely’. The share of consumers planning to buy major appliances and cars increased, while those planning to buy homes decreased. The share of consumers that said jobs are currently plentiful reported in at 39.7% down from 39.4% the previous month. Consumers that said jobs are currently hard to get declined to 13.1% from 14.2%.

The Federal Open Market Committee (FOMC) announced the it would keep its benchmark federal funds rate in the range of between 5.25% to 5.5%. The vote was unanimous to maintain the current benchmark federal-funds rate. The central bank has raised its benchmark borrowing rate 11 times. The FOMC statement stated that “In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,”. The Fed did not rule out the possibility of more increases. Federal Reserve Chairman Jerome Powell in his post-meeting press conference reiterated that the Fed has yet to determine whether financial conditions are restrictive enough stating “We haven’t made any decisions about future meetings.” When pressed further about a December rate hike Powell stated “The idea that it would be difficult to raise again after stopping for a meeting or two is just not right. I mean the Committee will always do what it thinks is appropriate at the time”.

The U.S. Bureau of Labor Statistics reported 150,000 jobs were added as the unemployment rate ticked up to 3.9% in October. August and September’s employment readings were revised down for a combined (-101,000) less jobs. The number of unemployed workers was little changed at 6.5 million. Healthcare care led the way adding (+58,000) jobs followed by government (+51,000), construction (+23,000), social assistance (+19,000), and leisure & hospitality (+19,000). Manufacturing (-35,000), transportation & warehousing (-12,000), and information (-9,000) all reported job losses. Among the unemployed, the number of permanent job losers increased (-164,000) to 1.6M, and the number of reentrants to the labor force decreased (-159,000) to 1.89M. The labor force participation rate was little changed at 62.7%, leaving it is still below the pre-pandemic level of 63.4%. Average hourly earnings increased by 0.2%. At $34.00 average hourly earnings are up 4.1% from a year ago. The average hourly earnings growth reading was the lowest monthly value since February 2022 and the lowest year-over-year value since June 2021.