Consumers are only slightly more optimistic about the economy this month than last, but many also believe their incomes are stable, which could translate to future spending, according to a survey released Tuesday.
The Conference Board business research group said its September consumer confidence index registered 62.6, up three points from August but still below the level registered in January. The index base of 100 was set in 1985.
“Although consumers are now moderately more positive than they have been in the past four months, the overall level of confidence continues to be fragile,” said Fabian Linden, executive director of the board’s consumer research center.
He said September’s reading still indicates a lackluster economy. “Certainly we are not yet receiving signals of a pending business recovery,” he said.
The monthly Conference Board survey is based on a sampling of 5,000 households and is considered an indicator of future economic activity.
One out of three who participated in the poll said business conditions are bad; 15% considered them to be favorable.
“This still leaves confidence at a pretty low level,” said Robert Brusca, chief economist at Nikko Securities Co. International. “The index continues to improve, but there’s not a lot of upward momentum.”
Fewer than 9% of those polled said jobs are plentiful; about 40% said it is difficult to get work.
There was only slightly more optimism about conditions in the near future. About twice as many respondents said there will be fewer jobs six months into the future compared to those that said there will be a pickup in hiring. This measure was little changed from August.
In addition, plans to make major purchases--cars, major appliances and houses--have been scaled back. This measure seemed to improve in August but deteriorated somewhat in September.
One important bright spot in the report was a sizable decline in the number of respondents who feared loss of income in the coming months.
“If people think their incomes will grow, it would provide a better indication that consumer spending will pick up,” Brusca said. “We do know that spending already is picking up. Auto sales are up; department store sales are improving.”
Across the country, the mood seemed most upbeat in the mountain region. It was most pessimistic in the middle Atlantic and Pacific regions.
From a monthly survey of 5,000 households. Index: 1985 = 100:
Jan. 1992: 50.3
Sept. 1992: 57.3
Sept. 1993: 62.6
Source: Conference Board