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The Conference Board, a New York-based private research organization, within the past hour reported that its consumer confidence survey had declined sharply in October, falling from September's reading of 80.2 to October's level of 71.2.

Also falling was the Present Situation's Index, which eased from 73.5 to 70.7. This is a somewhat backward looking component, and normally maintains a lower reading. Moreover, the Expectation's Index, which looks out by some months, and is often a more upbeat survey, fell more sharply, plunging from 84.7 last month to 71.5 in October. All in all, this was a disquieting report, but not out of line with recent thinking, which had the overall index falling to a reading of 74.0.

Of note, the monthly Consumer Confidence Survey is based on a probability designed random sample. The cutoff date for the survey was October 17th, or just about the time that the U.S. government's shutdown ended and a debt-ceiling extension was formalized, at least until next February. Given the uncertainty engendered by these two separate government matters, it is not surprising that the confidence level among consumers has fallen back. All told, this was the lowest reading since the spring.

Meanwhile, according to a Conference Board spokesperson, "Consumer confidence deteriorated considerably as the federal government shutdown and debt-ceiling crisis took a particularly large toll on consumers' expectations. Similar declines in confidence were experienced during the payroll tax hike earlier this year, the fiscal cliff discussions in late 2012, and the government shutdown in 1995/1996." These declines, historically, have been temporary, so it would not be wise, in our view, to overreact to them--at least for now.

Looking at the various components that make up the survey, including those relating to business conditions and consumers' appraisal of the employment situation, they were almost universally unfavorable, including the outlook for employment in the months to come, which is always a closely watched part of this report.

Taken as a whole, as noted, this was a dour and somewhat disappointing report. However, given the normally temporary nature of such event-driven declines in this series, we do not view it as a game changer, but rather as just one more suggestion that the Federal Reserve, which is meeting now, will opt to hold the line on monetary policy when its concludes its FOMC meeting tomorrow afternoon.

At the time of this article's writing, the author did not have positions in any of the companies mentioned.