1 October 2009
Job worries knock Sept. consumer confidence down
This past month, Americans remained worried about job security, causing a widely watched barometer of consumer confidence to dip unexpectedly and raising more concern about the overall economic recovery.
The New York-based Conference Board, a private research group, said its Consumer Confidence Index dipped to 53.1 in September, down from the revised 54.5 reading in August. Economists surveyed had expected a reading of 57.
The index had enjoyed a three-month climb fueled by signs the economy might be stabilizing. That followed a historic low in February of 25.3 and a bumpy road after June as rising unemployment caught up with shoppers.
A reading above 90 means the economy is on solid footing, and above 100 signals strong growth.
While the confidence index has doubled from the historic low in February, it is still about half of the historic average and below the 61.4 level right before the collapse of Lehman Brothers last fall.
Paul Dales, U.S. economist at Capital Economics Ltd, said despite a rally in the stock market, shoppers are fixating on the job market and declining wages.
“Falling employment and incomes are undermining confidence and are likely to continue to do so,” Dales wrote in a report released Tuesday. “Confidence is set to remain at fairly subdued levels,” adding that consequently consumer spending will remain modest.
Economists watch consumer sentiment because spending on goods and services for consumers, including housing and health care, accounts for about 70% of U.S. economic activity by federal measures.
For related information, go to www.isa.org/productivity.