Consumer Confidence Takes a Surprising Dip : Economy: Survey’s monthly index puts level back to where it stood in July and August.

Consumer confidence in the economy suffered an unexpected and sharp setback in October as the outlook for jobs and financial security dimmed, according to a widely followed survey released Tuesday.

The Conference Board, a New York research group that tracks sentiment through the monthly poll, said its consumer confidence index registered 59.4 in October, a loss of 4.4 points from the previous month.

That sent the index, calculated on a 1985 base of 100, back to where it stood in July and August.

Since January, the index has shed more than 17 points, reflecting a steep decline in expectations.

“There continues to be little in recent consumer confidence survey readings to suggest that a significant improvement in the economy is likely in the months ahead,” said Fabian Linden, a Conference Board economist who oversees the survey.

Instead, many consumers expected their own finances to be in worse shape over the next six months.

The Conference Board survey is watched as an indicator of consumer buying patterns and the health of the economy.

Since consumer spending accounts for two-thirds of the nation’s economic activity, growth depends on consumer willingness to borrow and spend.

Economists were surprised by the data.

“It was a disappointment,” said Michael Metz, a vice president at Oppenheimer & Co., a Wall Street investment bank. “We thought it would show slight improvement; instead, it deteriorated radically.”

The survey found that more than twice as many respondents said current business conditions are bad compared to those who expressed a positive view.

Further, 40% characterized jobs as hard to get, more than four times as many who believe jobs are plentiful.

Looking ahead six months, those who think there will be fewer jobs outnumbered those who expect more jobs by nearly 3 to 1. The Conference Board also said there was a moderate decline in the number of consumers who expect higher family income in the coming months.

The survey found consumer buying plans were generally weak, except for car purchases. Indeed, the leading U.S. auto makers Monday said sales of domestically built new cars and trucks rose 18.5% in mid-October, kicking off a strong start to the 1994 model year.

The survey is compiled from answers to questionnaires sent to 5,000 households across the country, querying them on topics ranging from car buying plans to local job conditions.

Consumer Confidence

From a monthly survey of 5,000 U.S. households.

1985=100 Source: Conference Board