In some negative news for the US economy, it was reported that US consumer confidence deteriorated to a three month low in October on the back of the dampening optimism over the health of the economy and dimming the case for a US interest rate hike this year. According to a report released by the Conference Board, it was stated that its index of consumer confidence fell to 97.6 this month from a reading of 102.6 in September which is being seen as a huge negative. Analysts on the street had expected the reading to come in at 103.0 in October.
Analysts on the street believe that the report is a clear indication that consumers were less positive in their assessment of present day conditions, in particular of the job market and were moderately less positive about the short term outlook. The consumer confidence index is a closely gauge by traders and investors as it provides an insight into consumer spending trends in the coming months. It is imperative to state that consumer spending makes up for more than two thirds of the total GDP growth in the economy. Analysts on the street have cut their growth forecasts for the US economy on the back of the sharp slowdown seen in the Chinese economy and the strong dollar which has hurt US exports.
All eyes would be on the GDP report that would be released during the weak as it would provide an insight into the whether or not the US economy continues to have the growth momentum which it has seen over the last six years. Many analysts believe that the Federal Reserve might be forced to defer its decision to hike interest rates to next year as the downside risks posed by the slowdown in the Chinese economy continues to hurt the economy.