A benchmark private survey of US consumer confidence was sharply lower in October, New York-based business think tank The Conference Board reported on Tuesday.
The index fell to 71.2 from 80.2 in September. It was the largest one-month drop in more than two years for the long-running index, which is set to a 1985 benchmark of 100.
The survey was only conducted through October 17, which was the day that US President Barack Obama signed legislation to authorise Government spending and borrowing into early 2014. The measure was passed with the US Treasury on the brink of default.
Non-essential Government operations were closed from October 1-16 as Congress was unable to agree on a budget for the start of the new fiscal year.
“Consumer confidence deteriorated considerably as the Federal Government shutdown and debt-ceiling crisis took a particularly large toll on consumers’ expectations,” Conference Board economist Lynn Franco said.
With the temporary legislation setting up new deadlines for the sharply divided Congress to act in January and February, “confidence is likely to remain volatile for the next several months,” she said.
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