As expected, consumer confidence took a hit in October as the partial federal government shutdown and fiscal fights weighed on consumers. Both current and future expectations dropped for the month.

In October, consumer confidence fell to 71.2 from the upwardly revised September reading of 80.2. Consumers' assessment of current economic conditions fell to 70.7 from 73.5 in the prior month. The future expectations component pulled back as well, to 71.5 from the 84.7 reading in September.

More telling were the future buying plans of consumers, which also slid for the month. Fewer consumers indicated that they planned to buy automobiles and homes over the next six months, which suggests that the sizable drop in confidence in October may translate into reduced consumer spending activity in the months ahead.

The October survey data likely reflect the period in the month that encompassed the worst aspects of the fiscal policy fight, before a deal was announced or the end of the shutdown was in sight, thus the pullback was a bit sharper than expected.

Given that the latest fiscal policy deal only kicks the can down the road until January, we expect consumer confidence to take another hit to start the new year. While it remains to be seen if these distractions from core economic fundamentals will be enough to adversely impact actual consumer spending activity, the ongoing political disagreement continues to pose downside risks to consumer spending activity over the next couple of quarters.

Our expectation is that real consumer spending will grow at a relatively slow pace of only 2.1 percent in the fourth quarter of 2013 as well as in the first quarter of next year. As expected, we recently downgraded our views of consumer spending in the fourth quarter of this year and the first quarter of next year as a result of current and ongoing political uncertainty adversely impacting consumer expectations.

DALTON, GEORGIA

Oriental Weavers (OW) has promoted seasoned sales professional and industry veteran Craig Johnson to National Accounts manager. In his new role, he will be responsible for overseeing and fostering the growth of several key national accounts for the company.

Johnson brings over 20 years of advanced sales leadership to Oriental Weavers' National Accounts team. He has been with the company for more than six years, serving as sales representative in the Iowa and Nebraska territories. During his tenure at Oriental Weavers, Johnson has experienced tremendous success, earning several prestigious awards for top sales performance and superior account management. Prior to joining OW, Johnson was with Florstar Sales where he successfully managed a variety of floor covering retailers.

 "We are thrilled to have Craig bring his talents and energy to our National Accounts team, said Jonathan Witt, vice-president of Oriental Weavers. "He's proven invaluable to the company over the years and we're excited to watch his success working with our National Account retail partners. Craig's passion for the rug business and broad understanding of assortment planning is unmatched and we look forward to further enhancing our retail partnerships through Craig."

Johnson will be based out of his Iowa office.

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