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Last Updated: Tuesday, 26 October, 2004, 23:44 GMT 00:44 UK
US consumer confidence dips again
Shopper in the US
US consumers are concerned about future job opportunities
US consumer confidence has hit a seven month low ahead of next week's presidential election.

Continuing job worries saw confidence fall in October for a third consecutive month, The Conference Board said.

The research group's index dropped 3.9 points to 92.8, down from 96.7 in September - its lowest since March.

Analysts look to consumer confidence gauges for indications on the outlook for spending, which drives two-thirds of the US economy.

Sales of homes and cars in the US have been fuelled by low interest rates but some economists now worry that a fall in new employment opportunities could undermine spending.

Subdued expectations

The Conference Board found its index was dragged lower by expectations for the future.

The survey's index hit 88.5 in March. It rose from April to August and then started to fall.

"Subdued expectations, as opposed to eroding present-day conditions, were the major cause behind October's decline," said Lynn Franco, director of The Conference Board's consumer research wing.

"And while consumers' assessment of the labour market this month showed a moderate improvement, the gain was not sufficient to ease concerns about job growth in the months ahead."

Election precedent

Since the confidence data was first compiled in 1967 only one incumbent president - Ronald Reagan in 1984 - has won an election with the index below 100.

Consumer confidence is higher under George W Bush than under those incumbents who lost, and figures on Friday are expected to show the US economy is continuing to grow.

But Jared Bernstein of the Economic Policy Institute in Washington said issues covered by the consumer confidence index do matter more to the electorate than official data.

"People are much more prone to the kind of indicators in the consumer confidence index," he told BBC TV's World Business Report.

"Things like employment growth and where they think incomes are headed, and both of them are on a solidly negative trend."

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