Consumer confidence much lower than expected in October

CNBC with Reuters
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U.S. consumer confidence fell sharply in October as consumers turned gloomier in their outlook for the future, according to a private sector report released on Tuesday.

The Conference Board, an industry group, said its index of consumer attitudes dropped to 71.2 in October from a revised 80.2 in September, previously reported as 79.7.

Economists had expected a reading of 75.0 in October. The expectations index also sank, down to 71.5 in October from a revised 84.7 in September.

Consumers were also less optimistic about their current standing, with the present situation index down to 70.7 in October from a revised 73.5 in September.

Meanwhile U.S. business inventories rose as expected in August, suggesting restocking could provide a lift to third-quarter economic growth.

The Commerce Department said on Tuesday inventories increased 0.3 percent after rising 0.4 percent in July.

August's increase in inventories was in line with economists' expectations. Inventories are a key component of gross domestic product changes.

Businesses have been wary of ramping up stock accumulation after consumer spending slowed in the second quarter. They appear to be stocking up for the holiday season.

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CNBC with Reuters