CONSUMER CONFIDENCE DOWN BUT NOT A THREAT

Byline: Carol Emert

WASHINGTON--The Conference Board's consumer confidence index dropped five points in September but remained at a level generally associated with a healthy economy, according to data released Tuesday.
This month's confidence index fell to 97.4 points from August's reading of 102.4, based on the board's 1985 yardstick of 100. A year ago, in September 1994, the index came in at 89.5.
In the last 12 months, it has ranged from a low of 94.6 in June to a high of 104.6 in April.
This month's decline "may be just noise, or it may be that people are reacting in a lagged way" to the weak economy in the second quarter, said Ira Silver, chief economist with J.C. Penney Co.
Politics is another possible explanation for the pessimism, Silver said. "I think uncertainty tends to breed a loss of confidence," he said. "People in Washington are talking about budget cuts, even shutting down the government. And the campaigns for the next presidential election have started."
However, Fabian Linden, director of the board's Consumer Research Center, said September's index "reflects a modest U.S. unemployment rate and low inflation--circumstances that continue to be reassuring for the economy in the months ahead."
Readings in the vicinity of the September figure have "been historically associated with healthy economic activity," he said.
The board's survey of 5,000 households pegged consumer confidence about the present situation at 109.4 in September, down from 113.9 in August. Expectations for conditions six months from the current period dropped to 89.4 from 94.7. --Fairchild News Service

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