The tough business environment and strained job market last month undermined consumer confidence, which fell to its lowest level since February.
The Conference Board’s Consumer Confidence Index retreated to 48.5 from 53.2 in August. The measure of consumer well-being stood at 51 in July and 54.3 in June.
“September’s pullback in confidence was due to less favorable business and labor market conditions, coupled with a more pessimistic short-term outlook,” said Lynn Franco, director of the research group’s Consumer Research Center. “Overall, consumers’ confidence in the state of the economy remains quite grim. And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months.”
Both of the index’s components fell, with the Present Situation Index dropping to 23.1 from 24.9 and the Expectations Index declining to 65.4 from 72. The indexes are based on a survey of 5,000 U.S. households.
People are feeling worse about the current environment, with 46.1 percent of the survey’s respondents rating business conditions as “bad,” up from 42.3 percent last month.
Meanwhile, consultancy Kantar Retail predicted fourth-quarter sales, outside of the auto, food and drug channels, would rise 2.5 percent from a year earlier. That would be a boost from the 0.5 percent growth in the fourth quarter last year, but Kantar said holiday sales would still feel weak compared with the relatively strong start to 2010.
“Prices and uncertainty will weigh heavily on the holiday outlook,” said Frank Badillo, senior economist at Kantar. “Ongoing price competition among retailers, led by Wal-Mart, is more likely to take a toll on sales gains than boost unit demand among shoppers who remain value conscious.”