[techweenie]

Tue Oct 26, 2004 10:23 AM ET

Consumer Gauge At To 7-Month Low

NEW YORK (Reuters) - U.S. consumers turned more gloomy in October, beset by soaring energy prices, relentless violence in Iraq and the increasingly bitter end of the presidential election campaign.

The Conference Board's gauge of consumer confidence fell to 92.8 in October, the lowest level in seven months, from 96.7 the prior month, the private business group said on Tuesday. The reading was below economists' expectations for a dip to 94.0.

The main index was dragged down mainly by consumer expectations, which tumbled to 92.0 from 97.7. The current conditions index slipped to 94.2 from 95.3.

"Consumers are more concerned about the future than they are about current conditions and I think that has a lot to do with the high oil prices we're seeing and probably some of the election rhetoric," said Gary Thayer, chief economist at A.G. Edwards & Sons in St. Louis.

In one slightly positive sign, fewer consumers said jobs were "hard to get," at 27.8 percent compared with 28.0 percent the prior month.

Despite strong economic growth, businesses are cautious about hiring workers while faced with record oil prices and steep health care costs.

"While consumers' assessment of the labor market showed a moderate improvement, the gain was not sufficient to ease concerns about job growth in the months ahead," said Lynn Franco, director of the Conference Board's Consumer Research Center, in a statement.

Analysts and traders scrutinize consumer confidence gauges for hints on the outlook for spending, which drives two-thirds of the U.S. economy. Households have consistently kept shopping for cars and homes despite expressing worries on the economy. Yet some economists are questioning how much more consumers will be able to shoulder the economic burden.