Consumer Confidence Falls

“Oct. Consumer Confidence Hurt by High Gas Prices Tuesday, October 25, 2005 (off Fox News)

NEW YORK — Consumer confidence worsened in October after staging a dramatic fall last month as hurricanes, high gasoline prices and uncertainty over jobs continued to weigh, the Conference Board said Tuesday.

The Conference Board said its index of consumer sentiment fell in October to 85.0 from a September reading of 87.5, which was revised upward from 86.6. A Reuters poll of economists had produced a median forecast for a rise in October to 88.1

"Much of the recent decline in confidence over the past two months can be attributed to the recent hurricanes, (gas) pump shock and a weakening labor market," said Lynn Franco, director of the Conference Board Consumer Research Center.

The business research group's present situation index fell to 108.2 from an upwardly-revised 110.4, while the expectations component dropped to 69.5 from an upwardly revised 72.3.

"We had expected a rebound. Gasoline prices are down a lot, so that is good news, but they are still very high and that may be what is weighing on people's minds at this point," said Kurt Karl, head of economic research at Swiss RE in New York.

Sentiment indexes have traditionally been seen as a gauge of U.S. consumer spending, which accounts for roughly two-thirds of overall economic activity.

But the low interest rate environment of recent years has seen sentiment and spending de-couple as consumers have continued to buy new cars and houses in spite of their concern over the economic outlook.

However, the drop in the consumers' assessment of current conditions in the survey indicated that spending could suffer.

"This 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 Conference Board's Franco said.

"In order to avoid a blue Christmas, retailers will need to lure shoppers with sales and discounts," she added.

Consumers' view of the labor market darkened this month as well, according to the Conference Board.

The survey's "jobs hard to get" index edged up to 25.3 in October, from 25.0 in September, making this the highest reading since December 2004.

The short-term outlook was also less favorable.

Consumers who were expecting business conditions to worsen over the next six months fell to 18.4 percent in October from 19.6 percent in September, while those expecting conditions to improve dropped to 14.0 percent from 15.4 percent.”

“Gasoline Prices Fall
Oct 25, 2005
Automotive News


Gasoline prices are creeping downward, but they're still significantly higher than last year.

The average price of a gallon of regular unleaded gasoline was $2.61 on Tuesday, an 8-cent drop from $2.69 on Friday, Oct. 21. One month ago, the average price was $2.78 a gallon, and in late October 2004 it was $2.02, according to AAA, of Hawthorne, Fla.

Diesel fuel averaged $3.22 a gallon on Tuesday, 1 cent less than four days earlier. One month ago it was $2.85, and one year ago it was $2.22.

AAA surveys as many as 85,000 self-serve filling stations daily and reports its findings on www.fuelgaugereport.com.

The price of crude oil lingered around $61 a barrel Tuesday, unmoved by Hurricane Wilma, which did not affect the oil-producing region of the Gulf of Mexico.

Kailua Kona, Hawaii, had the most expensive gasoline -- $3.24 a gallon -- seen in the United States. Oklahoma City had the cheapest price, $2.02 a gallon, according to GasPriceWatch.com.

GasPriceWatch.com uses volunteer spotters and has recorded more than 224,000 prices this week.


Gasoline Prices Fall 14 Cents
Source: Detroit News

Metro Detroit gasoline prices dropped 14.3 cents a gallon last week, prompting smiles from motorists who've watched pump prices plummet 45 cents in three weeks.

Drivers paid an average of $2.46 a gallon for regular unleaded in Metro Detroit and $2.52 statewide, according to AAA Michigan's weekly survey of 2,800 service stations.

"I never thought I'd be excited to see gas below $2.50," said Troy Feldpausch of New Boston, a software training consultant. "It's still pricey, but I'm happy to see the prices going down."

A combination of factors sent fuel prices dropping during the month, said AAA Michigan spokesman Jim Rink. The latest hurricane, Wilma, missed the Gulf Region, where most gasoline refineries are located, plus refineries shut down earlier by hurricanes Katrina and Rita are now coming back online.

"And the demand for gasoline is down," Rink said. "The summer driving season is over and people are driving less."

Gas prices are falling with the cost of crude oil, which dipped 31 cents Monday to settle at $60.32 a barrel on the New York Mercantile Exchange.

Rink said energy analysts believe gas prices will continue to decline, but are not expected to drop to the $2 a gallon level.

The average price for self-serve, unleaded this month is $2.70 a gallon in the Detroit area -- 70 cents higher than a year ago, according to AAA. Even as prices drop, they're still too high to suit many local motorists, but drivers in 40 other states are paying more. The most expensive gas this week is in California, with an average price of $2.86 for regular unleaded.”

“Good. I hope people consume less, and I can't wait for gas to go sky high at over $5 per gallon.

Just wait. It will get there sooner than later.”

“It may be down over the last few months, but everything I see suggests it has been recovering as the price of gas goes down and the shock of Katrina fades.”