Consumer Confidence Declines; Wages, Benefits Up 1%, 2-Year Best Quarterly Pace

Consumers' confidence in the economy weakened in October on job worries, according to The Conference Board whose consumer confidence index edged down to 105.4, from a revised 105.9 in September. October's dip in confidence was prompted by consumers' mixed assessment of present-day business conditions and a less favorable view of the job market," said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement. "Consumers' short-term expectations posted a slight improvement, but the outlook for the labor market remains mixed."
Labor market conditions were less positive than last month. Consumers saying jobs are "plentiful" declined to 25.8% from 26.2%. Those claiming jobs are "hard to get" increased to 22.0% from 20.9% in September.

The Labor Department reported that its Employment Cost Index was up 1% in the third quarter, compared to a 0.9% rise in the April-June period. It was the biggest quarterly increase since a similar 1% rise in the second quarter of 2004.

For the third quarter, benefit costs rose by 1.1 percent, up from a 0.8 percent gain in the second quarter. Wages and salaries were up 0.9 percent, matching the increase in the second quarter.

For the 12 months ending in September, overall compensation costs were up 3.3%, compared to a 3% rise for the 12 months ending in September 2005.

Wages and salaries are up 3.2% over the past year, a significant rise from the 2.3% gain for the 12 months ending in September 2005. Benefit costs, however, were up 3.3% for the year, down from a 5% rise for the year ending in September 2005.

Compensation costs for the private sector rose 0.9% from June to September, after advancing 0.8% in the prior quarter. For state and local government workers, compensation costs increased 1.4% from June to September, after increasing 1.1% for the quarter ended in June.


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