Consumer Confidence Dips for 3rd Month : Economy: A separate report finds sales of existing homes in California fell 9.2% in the month of August.

Disturbing signs emerged Tuesday that suggested consumers are increasingly insecure and pessimistic, boding ill for the already shaky economic recovery and the upcoming Christmas shopping season.

The Conference Board, a business research group, said its consumer confidence index skidded in September, the third straight drop for the widely followed barometer of consumer attitudes.

The group said its consumer confidence index, a compilation of data that uses a 1985 base of 100, plunged 3.4 points to 72.7 in September from 76.1 in August. The drop was the third straight in the index, which is based on responses from a survey of 5,000 households nationwide.

Americans are growing more worried about the current state of the economy and less sure about business conditions six months from now, the Conference Board said.

“Given recent consumer confidence readings, those who expect the economy to rebound in the remaining months of the year are likely to be disappointed,” said Fabian Linden, a Conference Board economist.

Consumer expenditures account for two-thirds of the gross national product, making the economy’s recovery from recession dependent on consumer willingness to spend.

But, as Linden put it: “A concerned and insecure consumer is a cautious spender.”

The slump in confidence is reminiscent of a year ago, when the start of the Persian Gulf crisis frightened consumers into curtailing purchases in the fall and at Christmas.

This year, while the Gulf crisis is long past, the outlook for Christmas is dim because overall retail sales are sluggish at a time when they normally are accelerating.

Daniel Barry, a retail industry analyst with Kidder, Peabody & Co., said he has revised expectations for the holiday season downward, partly because sales in September have been weak.

“It’s very clearly the economy,” Barry said. “There’s no life to durables (or) catalogue sales.”

Adverse weather has stalled sales in some parts of the country, but even where there were better conditions, sales continued to be sluggish, Barry said.

Alan Levinson, an economist with Wefa Group in Bala-Cynwyd, Pa., predicted some improvement in job growth and therefore consumer confidence and spending in coming months. However, he said, “we’re not talking about gangbusters growth.”

Even if consumers regain their spirit in time for Christmas, they are expected to spend carefully and conservatively. Retailing experts say that will likely benefit discount stores and some apparel retailers but not more upscale merchants.

The survey found unemployment continues to be a particular concern among consumers. Forty percent of the survey respondents said jobs are now hard to get, while only 7.5% called jobs plentiful.

Separately, a real estate trade group reported that sales of existing homes in California fell 9.2% in August for the third straight month because of a continued sluggish economy.

In the Los Angeles area, sales plunged 17.5% from July on a non-seasonally adjusted basis, but were unchanged from August, 1990, the California Assn. of Realtors reported.

CAR officials blamed a generally sluggish California economy for the August slump, which continued a three-month sales slide.

“Although August’s housing sales were weak, there are some indications that September’s home sales may be better,” CAR President Mack Powell said. “Increased home buying interest and dropping mortgage interest rates are encouraging signs.”

Statewide, the median price of an existing, single-family detached home dipped 2.6% from $206,360 in July to $201,020 in August.

Home Sales Fall Seasonally adjusted annualized rate of home sales in California. (in thousands of units) 1991: August, 1991: 406,700 Source: California Assn. of Realtors