The monthly expectations gauge showed 47% of respondents said the economy was going to get worse, up 13 points from September. That was the biggest surge since October 2008, the month after Lehman Brothers was brought down by the financial meltdown as the housing bubble burst. Back then, the negative reading surged by 30 points to 82%.
The weekly Bloomberg comfort measure dropped 4.4 points from minus 29.7 the previous period, the biggest decline since April 2012. The measure reached an almost five-year high in early August.
Faith Williams, 72, a retired school librarian from Washington, said she’s thankful she has other sources of income to tide her over should social-security payments ever be delayed.
She said the shenanigans on Capitol Hill reminded her of her former wards. The gridlock “seems so childish,” Williams said. “I was a preschool librarian and we had ways of getting them to talk and behave.”
All three components of Bloomberg’s weekly gauge dropped. The index tracking Americans’ views of their personal finances fell to minus 0.1, the first negative reading in five weeks, from 4.7. The buying-climate measure declined to minus 36.9 from minus 33.5 the week prior. A gauge of the current state of the economy decreased to minus 65.3, the worst in a year, from minus 60.2 the week before.
As Americans turned more downbeat about the economy and the state of their finances, retailers are bracing for a possible drag on holiday sales. Companies including Wal-Mart Stores Inc., the world’s largest retailer, are watching to see how the fiscal uncertainty may affect consumer spending in the weeks ahead.
“As you would expect, we’re following this situation very closely,” Chief Executive Officer Mike Duke said on an Oct. 15 conference call. “It should come as no surprise that the government shutdown, it’s on the minds of our U.S. customers.”