Business

Consumer Confidence Falls to Nine-Month Low

Consumer Confidence Falls to Nine Month Low

A shopper April 24 at an American Apparel store in Santa Monica, Calif. (By Reed Saxon, AP)

Americans are feeling worse about the economy than they have in a long time — a fact that could have wide-reaching implications everywhere from Wal-Mart to the White House.

Driven by growing concerns over the job market, consumer confidence has fallen to its lowest point since November 2011, according to The Conference Board, a private research group.

“And consumers don’t believe conditions are likely to change. Only 15.4% of people surveyed expect that there will be more jobs available in the next six months, down from 17.6% in July,” CNN Money reports.

“The survey also found that only 16.5% expect business conditions to improve in the next six months, down from 19% who were looking for better times ahead last month,” the report adds.

August’s reading not only threatens to put a damper on retail sales for the back-to-school and winter holiday seasons — the two biggest shopping periods of the year — but it also could have an impact on how Americans vote in November’s presidential election.

Mark Vitner, a Wells Fargo Securities senior economist, says he has looked at October confidence figures during the past elections of sitting presidents since 1972. No president has been re-elected when confidence was below a reading of 90, which indicates a healthy economy. The index hasn’t reached that level since December 2007.

“This report is a little disturbing going into the fall,” Vitner said. “Consumers are less optimistic about the future.”

The New York-based Conference Board said its Consumer Confidence Index in August fell to 60.6, down from a revised 65.4 in July and the 66 analysts were expecting. The index now stands at the lowest it’s been since November 2011 when the reading was at 55.2.

The Consumer Confidence index, based on a survey conducted Aug. 1 to Aug. 16 with about 500 randomly selected people nationwide, underscored Americans’ anxiety about the future. Consumer confidence is widely watched because consumer spending accounts for 70 percent of U.S. economic activity.

“Consumers were more apprehensive about business and employment prospects,” said Lynn Franco, director of Economic Indicators at The Conference Board in a statement.

In the latest reading, the percentage of consumers expecting business conditions to improve over the next six months declined to 16.5 percent from 19. Those expecting more jobs in the months ahead declined to 15.4 percent from 17.6 percent, while those expecting fewer jobs rose to 23.4 percent from 20.6 percent.

In addition to worries about jobs and business conditions, Americans’ outlook also may be influenced by gas prices. They fell sharply from a peak of $3.94 in early April, but have started to surge again in recent weeks. In fact, gas prices at the pump rose 19 cents to $3.71 during the period that captures the survey.

Americans also are worried that the U.S. economy will go off a “fiscal cliff” at the end of the year, said Vitner, the Wells Fargo economist. That’s when tax increases and deep spending cuts will take effect, unless Congress reaches a budget agreement by then.

Whether or not Congress will do that is doubtful.

The Associated Press contributed to this report. All photos courtesy AP.

Comments (8)

  • Steel
    Posted on August 29, 2012 at 12:25pm

    Do y’a think obama and his thugs have anything to do with this? Do ya’, huh? Well do ya’, punk? Go ahead. Make my day!

    Report Post »  
  • florida123
    Posted on August 29, 2012 at 12:09pm

    Banana Republic if the Kenyan Village Idiot is not replaced!

    Report Post » florida123  
  • MaxineH20Sux
    Posted on August 29, 2012 at 12:26am

    Don’t you all love when the lame stream media claims sconsumer spending was up last month! Ummm, duh, people have to buy their kids school supplies and clothes and sneakers. We HAVE TO. I love how they claim that too when certain holidays come around. How stupid do they think we really are??

    Report Post » MaxineH20Sux  
    • Rothbardian_in_the_Cleve
      Posted on August 29, 2012 at 12:39am

      Yeah I know. Truth is that consumer confidence is a fickle metric to begin with. It’s too volatile to be a stable model input. Better indicators are consumer spending/saving, inventories, transportation metrics like rail traffic, copper/iron ore/coal as production inputs, housing completions (not starts or permits), labor participation rate (without the birth death model influence), current account activity, etc. For example, oil prices per barrel in relation to housing defaults is a great interaction to study.

      The headline economic metrics are so politicized and manipulated (like U3/U6) that I cringe at the finance wires.

      Report Post » Rothbardian_in_the_Cleve  
  • Rothbardian_in_the_Cleve
    Posted on August 29, 2012 at 12:25am

    What no comments on another economics article on the Blaze? (making my shocked face)

    Numbers aren’t fun, let’s run another race baiting article. Maybe another Mormon article.

    A crap-storm of epic proportions is lining up on the horizon. Europe is about to implode. China and Japan are in another recession. Our fiscal situation is essentially bankrupt except for the fact we can print money. Oh yeah, the BRIIC’s and African Union are working to end that little monopoly. Sovereign exposure to fiduciary derivatives is around 800Tr dollars. That’s 12X the GDP of planet earth. QE3 is coming to further socialize the risk of over leveraged financial institutions who squandered the first two and to steal purchasing power from every American born or unborn. The value of a dollar in 1915 dollars is now 13 cents. But talking about the Fed is booooooringggg, so let’s talk about Iran.

    The biggest threat to freedom, liberty, the republic and our children isn’t Owebama or Romney or Iran or the islamic bogey man, or gays or the rich or any of that. The biggest threat is that collectively we are too stupid to have the right conversations. Education has robbed society of the words to engage in debates with Krugman and Bernanke and Soros and Corzine and so on. So we don’t try. We engage in debates about gay marriage while we and our children are robbed blind. We seek out cotton candy candidates to make us feel better because reality is beyond comprehension. God

    Report Post » Rothbardian_in_the_Cleve  
    • SITDOWNANDSHUTUP
      Posted on August 29, 2012 at 10:01am

      I responded last night (thought I’d be the first response)
      But as I can see this morning, my text is no where to be found.

      Report Post »  
    • KeithOlberdink
      Posted on August 29, 2012 at 10:25am

      Everything is fine…relax. Keep watching dancing with the Stars, keep shopping, keep buying stocks…You worry too much.

      Report Post » KeithOlberdink  
    • KeithOlberdink
      Posted on August 29, 2012 at 10:27am

      ….end sarc.

      Report Post » KeithOlberdink  

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