Consumer confidence suffered its steepest monthly drop on record in October, a survey showed on Friday, as the worst financial crisis since the Great Depression sent shocks waves through the economy.
The Reuters/University of Michigan Surveys of Consumers said its index of confidence plummeted to 57.5 in October from 70.3 in September.
“Consumer confidence in early October registered its largest monthly decline in the history of the surveys,” the report said.
The index is now at its lowest since June this year. The report said there have only been four surveys that posted monthly declines of 10 index points or more.
“All of the prior double-digit declines were based on severe economic dislocations with the losses accelerated by fear and panic,” the report said.
The index came out well below economists’ expectations for a reading of 65.5, according to the median of their forecasts in a Reuters poll. Their 64 forecasts ranged from 55.0 to 70.0.
The University of Michigan confidence index dates back to 1952. Its record low was 51.7, which it hit in May 1980.
Consumers rated current economic conditions the worst on record, with this gauge falling to 58.9 from September’s 75.0.
Worryingly, short-term inflation expectations actually rose, even as consumers struggled with worsening job prospects and deteriorating personal finances. The gauge of one-year inflation expectations rose to 4.5% from September’s 4.3%.
However, five-year inflation expectations fell to 2.8%, its lowest since October 2007, from 3% in September.
The outlook for the future was bleak, with the index of consumer expectations falling to its lowest since July this year, when record-high oil prices were still pummeling sentiment.