NEW YORK -- Job concerns trumped rising wages and benefits last month, causing Americans' confidence in the economy to wane. Economists say the reason is that consumers seem obsessed with news about job losses at auto plants and other manufacturers, but aren't seeing the real picture -- a steady labor market.

"I think there is enough negative news on the employment front to offset the good stuff that is happening," Gary Thayer, chief economist at A.G. Edwards & Sons Inc. in St. Louis, said yesterday after the Conference Board released its monthly report. It showed consumer confidence slipped to 105.4 in October, short of an expected 107.8 and down from a revised 105.9 in September.

Mr. Thayer noted that media reports on outsourcing as well as layoffs among auto workers have distorted consumers' view on the job market and offset the benefits of falling gasoline prices and higher wages and benefits. The Labor Department yesterday reported that its Employment Cost Index rose 1 percent in the third quarter, its biggest increase in two years, led by a big jump in the cost of employee benefits such as health insurance and pensions.

Instead of rising wages, which Americans may be socking away in savings instead of spending, they have been fixated on job cuts in recent months from major household names such as Intel Inc., Goodyear Tire & Rubber Co., Ford Motor Co. and AOL.

"October's dip in confidence was prompted by consumers' mixed assessment of present-day business conditions and a less favorable view of the job market," said Lynn Franco, director of The Conference Board Consumer Research Center. "Consumers' short-term expectations posted a slight improvement, but the outlook for the labor market remains mixed."

The consumer confidence re-port -- derived from responses through Oct. 24 to a survey mailed to 5,000 households in a consumer research panel -- showed that labor market conditions were less positive than in September. Consumers saying jobs are "plentiful" declined to 25.8 percent from 26.2 percent.

Those claiming jobs are "hard to get" increased to 22.0 percent from 20.9 percent in September.

The outlook for the labor market, however, was mixed. Those expecting more jobs to become available in the coming months edged up to 15.2 percent from 14.7 percent, while those anticipating fewer jobs also increased to 17.5 percent from 16.5 percent. The proportion of consumers expecting their incomes to increase in the months ahead edged down to 19.6 percent from 20.2 percent in September.

"U.S. labor markets remain historically tight and wage pressures continue to mount, particularly for the most skilled workers. This is something the Fed is keeping its eye on," said Michael Gregory, an economist with BMO Capital Markets.

Officials at the Federal Reserve are watching to see whether wage pressures are beginning to accelerate, a development that would give workers' more money in their paychecks but could fuel unwanted inflation.

The Fed is hoping that its two-year campaign to slow the economy by raising interest rates will do the trick to send underlying inflation rates lower without slowing growth so much that the economy topples into a recession.

The government reported last week that the overall economy grew at an annual rate of just 1.6 percent in the July-September period, the slowest pace in three years, reflecting a fall in the once-booming housing industry.

Analysts believe that the recent decline in the cost of gasoline and other energy products will give consumers more money to spend on other items and provide a boost to the economy in the final three months of this year.

"Gas prices influence your pocketbook immediately," said Chris Donnelly, partner of Accenture's retail practice.