Rising Concerns about Long Term Economic Prospects The majority of consumers reported that the economy had recently weakened, as consumers have increasingly reported hearing news of job losses over the past several months. Importantly, consumers were more likely to anticipate improvement in the year ahead rather than a renewed economic downturn. Nonetheless, nearly six-in- ten consumers thought that overall conditions in the national economy would still be unfavorable. While positive economic growth was anticipated, it was expected to be so slow that consumers anticipated that the unemployment rate was more likely to rise than fall during the year ahead. Overall, just 17% expected a declining unemployment rate. A turnaround in this grim jobs outlook was not expected anytime soon. Indeed, when asked about growth prospects for the economy over the next five years, the largest proportion of consumers (59%) since the start of 2009 anticipated a renewed economic downturn sometime during the next five years.
Consumer Sentiment Index The Sentiment Index was 67.7 in the October 2010 survey, slightly below the 68.2 in September, but below last year’s 70.6. The Current Conditions Index improved, while future expectations for the economy worsened. A year-to-year decline of 9.8% was recorded in the Expectations Index, a component of the Index of Leading Economic Indicators. The decline in the Expectations Index compared with a year ago was due to less favorable prospects for both personal finances as well as for the overall economy.
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