Consumer Confidence Plunges

Already battered consumers have lost even more confidence in the economy during October as they contended with hurricanes, surging gasoline prices and worries about the job market.

The Conference Board, which tracks consumer sentiment, said Tuesday its Consumer Confidence Index fell to 85 in October from a revised reading of 87.5 in September, which marked the sharpest drop in 15 years. Analysts expected a reading of 88 for the index which is compiled from a survey of U.S. households.

"Much of the decline in confidence over the past two months can be attributed to the recent hurricanes, pump shock and a weakening labor market," said Lynn Franco, director of the private research group's Consumer Research Center in a statement.

She said the "degree of pessimism, in conjunction with the anticipation of much higher home heating bills this winter, may take some cheer out of the upcoming holiday season."

The nation's retailers are already preparing for a difficult season. Although gasoline prices have slipped back from recent weeks, they still are quite high, and home heating costs are expected to soar this fall and winter, forcing many consumers to budget carefully for the holidays.

Economists closely track consumer confidence because consumer spending accounts for two-thirds of U.S. economic activity.

One component of the Conference Board report, which examines consumers' views of the current economic situation, fell to 108.2 from 110.4 last month. The Expectations Index, which measures consumers' outlook over the next six months, fell to 69.5 from 72.3.

Consumers' assessment of the current employment market was somewhat bleaker than in September. The number of consumers saying jobs are "hard to get" rose to 25.3 percent from 25.0 percent, while the number saying jobs are "plentiful" was virtually unchanged at 20.8 percent.