It's not just retirement confidence that's dropping; consumer confidence is also falling, now reaching its lowest levels since we were in the midst of the recession. The most widely watched confidence reading, conducted by the Conference Board, has two basic measures, a current index and a future index, and usually the overall measure declines when one or the other drops. But in the October reading, people have gotten more pessimistic about both the present and the future.
The percentage of people who expect business conditions to be better in six months declined, as did the percentage of people who expect their income to decrease over the next six months. On the other side of the coin, the number of people saying that business conditions are bad right now increased in October, as did the number of people saying that jobs are "not so plentiful."
While these consumer confidence numbers provide a lot of insight into where consumer spending might be headed, it's important to realize that the people surveyed are random Americans, who don't have any special insight into the economy. For instance, the same survey found that inflation expectations over the next 12 months are at 5.8 percent. While anything is possible in this economy, the annual inflation rate hasn't actually been that high since 1982.
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