Job, economic worries worsen as financial crisis takes toll By Ruth Mantell, MarketWatch WASHINGTON (MarketWatch) -- Wounded by the financial crisis, U.S. consumer confidence plunged in October, reaching an all-time low in the series' 41-year existence, the Conference Board reported Tuesday. Despite falling gasoline prices, the October consumer confidence index fell to 38 from an upwardly revised September reading of 61.4. Economists surveyed by MarketWatch had expected an October reading of 52. See Economic Calendar. Expectations turned "significantly more pessimistic," with the percentage of consumers expecting business conditions to worsen over the next six months rising to 36.6% from 21%, and those expecting fewer jobs rising to 41.5% from 26.9%. "Their earnings outlook, as well as inflation outlook, is also more pessimistic, and this news does not bode well for retailers who are already bracing for what is shaping up to be a very challenging holiday season," said Lynn Franco, director of the Conference Board Consumer Research Center. The present situation index fell to 41.9 from 61.1. The expectations index reached a record low in October, hitting 35.5, compared with 61.5 in the prior month. Ian Shepherdson, chief U.S. economist with High Frequency Economics, expects to see an improvement in the expectations index. "The drop in stocks won't be repeated (we hope...) and the astonishing plunge in gas prices will lift sentiment, as it was before the market turmoil," Shepherdson wrote. "Make no mistake, though, these numbers are extraordinarily awful." Details The one-year inflation outlook among consumers rose to 6.9% from 6.2% The percentage of respondents with plans to buy an automobile within six months declined to 4.4% from 4.9%, while the proportion of those planning to buy a major appliance fell to 25.9% from 29%. Meanwhile, those with plans to buy a home rose to 2.7% from 2.3%. Why haven't consumers been swayed by the efforts in Washington, as well as coordinated global action, to offer financial relief? On top of watching retirement savings dwindle, the housing market remains weak and job losses keep rolling in. Terrin Griffiths, economist and industry analyst at the California and Nevada Credit Union Leagues, said consumers are "rather pessimistic" with regard to officials' actions that are focused on financial institutions rather than families' pocketbooks. "For any of those government actions to show any impact in the economy, it's going to take quite a few months to get a lot of those programs really going...a lot of the programs weren't really geared toward consumers," Griffiths said. Elsewhere Tuesday, the Case-Shiller home price index, published by Standard & Poor's, showed that home prices in 20 major U.S. cities dropped 1% in August compared with July, and fell a record 16.6% from the previous year. See full story.

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