Is it possible that the prolonged economic sluggishness is simply wearing consumers out? According to the Conference Board consumer confidence survey, September’s level was pretty much the same as August. The bad news is that the August reading was well below that of July.
The top-line number in the CB September report just barely managed to arc up over the August number – the Confidence Index edged from 45.2 all the way up to 45.4.
The Present Situation Index dropped from 34.3 to 32.5; but the slip was countered by a roughly equal and opposite improvement in the Expectations Index, which rose from 52.4 to 54.0.
“The pessimism that shrouded consumers last month has spilled over into September,” said CB’s Lynn Franco. “Consumer expectations, which had plummeted in August, posted a marginal gain. However, consumers expressed greater concern about their expected earnings, a sign that does not bode well for spending. In addition, consumers’ assessment of current conditions declined for the fifth consecutive month, a sign that the economic environment remains weak.”
Only 11.7% believe business conditions are good, down somewhat from August’s 14.1%, but the number saying conditions are bad was steady at 40.4% 50% believe that jobs are hard to get, up from 48.5% in August. Although the number of consumers saying that jobs are plentiful rose 0.7%, we wouldn’t quit our day job just yet – that increase takes the total only to 5.5%.
RBR-TVBR observation: The jury is still out as to the effect consumer confidence will have on holiday spending. Although households are generally managing their cash with fiscal austerity principles in place, the end of the year may feature some spending, if only to break the monotony.