NEW YORK — Americans’ assessment of the nation’s economic health faltered in September for the fourth straight month despite an improvement in their longer-term outlook.

The New York-based Conference Board’s index of consumer confidence, which is tabulated from a representative sample of 5,000 U.S. households, fell a smaller-than-expected 1.2 points this month to 93.3 from an upwardly revised 94.5 in August.

The Present Situation Index, the evaluation of ongoing conditions that constitutes half of the overall index, fell 4.6 points in September to 88.5, its lowest reading since November 1994.

The overall drop was the smallest in the four-month string of setbacks, indicating confidence could be stabilizing, and fell despite an increase in the Expectations Index. This latter component, which describes what consumers are looking for six months from now, rose to 96.5 from 95.5 in August. The last time the expectations and present situation indicators moved in different directions was in November 2001, and consumers’ hunches were borne out as the overall index rose to 110.3 in May 2002 from 84.9 in November 2001.

While consumers in the survey expressed increased concern over current circumstances, for the second straight month, a growing number had a hopeful view of the short-term outlook.

"The index was a good sign consumers are more optimistic about the outlook than last month, which historically is prevalent during a recovery," said Lynn Franco, director of The Conference Board’s Consumer Research Center, adding that, until the labor market improves, the index probably won’t either.

"If we were in dire straits, they would not be as positive in their outlook," Franco said. "We are getting mixed economic news which is still a path of growth, although it is not as robust as we would like."

Evaluating the mixed reading in consumer confidence, numerous profit warnings, geopolitical stress and the Federal Reserve’s decision to leave interest rates at 1.75 percent, investors sent the Dow Jones Industrial Average to its lowest close in four years. The Dow shed 189.02 points, or 2.4 percent, to close at 7,683.13, and the Standard & Poor’s Retail Index slid similarly, ending the session at 277.60, down 6.16 or 2.2 percent.Diane Swonk, chief economist with Bank One Corp., said she thinks apparel will benefit in the final months of 2002 as consumers become sated with purchases of automobiles and home merchandise. "I expect to see more movement into chain-store type sales as consumers back off spending on big-ticket items that were dominant over the summer and due to pent-up demand for clothing because of the warm weather last winter."

But, as reported, Wal-Mart and Federated Departments Stores Inc., said September sales are trending at the bottom end of their targets.

"Spending for September is coming in under expectations," John Lonski, an economist with Moody’s Investors Services, said. "It’s going to be a tough month with a weaker job market, as indicated by rising applications for unemployment benefits, and worry stemming from a possible conflict with Iraq and other matters related to the threat of terror."

The possibility of war with Iraq, he said, "is a real problem that weighs on consumer sentiment and is a real problem for companies who might be on the fence about undertaking capital spending or hiring new workers."

According to the monthly reading, fewer consumers expect to buy big-ticket items like automobiles, homes and appliances over the next six months. The survey said 6.8 percent of the respondents expect to purchase a car, down from 7.4 percent in August. In addition, 3.3 percent said they expect to buy a home, down from 4.5 percent, and 25.8 percent said they expect to buy a major appliance like a refrigerator or television, down from 31.1 percent.

Consumer attitudes were mixed about their present situation. Those rating business conditions as "good" increased to 18.2 percent from 16.7 percent. However, those rating conditions as "bad" also increased, to 23.3 percent from 21.8 percent. Consumers reporting jobs were plentiful declined to 15.9 percent, down from 17.4 percent. Those claiming jobs were hard to get climbed to 25.5 percent, up from 23.8 percent last month.

Overall, consumers were less pessimistic about the short-term outlook. While fewer participants in the survey expect an improvement in business conditions in the next six months — 21.5 percent in September, down from 22.2 percent in August — fewer consumers expect conditions to worsen, 9.6 percent in September, down slightly from 10 percent in August.The employment outlook was also more favorable this month. Those anticipating more jobs to become available in the next six months increased to 17.7 percent from 17.4 percent. But as for income prospects, fewer consumers said they expect an increase, 20.3 percent, down from 22.1 percent in August.

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