Consumer Confidence Falters for 4th Month : Economy: Findings come amid a backdrop of concerns over jobs and a steady rise in interest rates.

A jumble of disconcerting economic news emerged Tuesday, marked by faltering consumer confidence, weak wage growth, more cracks in the fragile dollar and evidence that higher loan rates are beginning to cause pain.

Taken together, the news suggests that the American economy, which had been thought to be growing at the healthiest clip since the 1990-91 recession, is not necessarily as robust as forecasters had reckoned.

The freshest signals on the economy’s direction came from the Conference Board, which reported that consumer confidence dropped in October for the fourth straight month.

“There’s a whole mosaic of unsettling things out there, so it’s not surprising to me that consumer confidence is weakening,” said David Bostian, an economist at Herzog Heine Geduld, a New York investment firm.

The Conference Board attributed the drop largely to rising anxiety over employment opportunities.

For the second straight month, consumers also cut back on plans to purchase homes, and they are reducing spending on cars and appliances. The index based on Conference Board survey results fell to 87.6 in October from 89.5 in September, hitting its lowest level since March.

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The results come against a backdrop of anxiety over jobs and a steady rise in interest rates--the cost of borrowing money.

Interest-rate increases began early this year when the Federal Reserve, reversing a five-year pattern of lower rates, started raising them.

The reports also offer evidence that ordinary Americans are not necessarily seeing benefits in the more prosperous economy. The Labor Department reported that compensation costs, including wages and fringe benefits, rose at an annual rate of 3.2% in the July-September quarter. That is among the smallest increases on record.

The news was viewed as a positive sign in the financial markets because it means there is not necessarily an inflation hazard with higher production costs for goods and services.

But many forecasters said they believe that it is inevitable that the Federal Reserve will push rates still higher because there is still a perceived threat of inflation.

Fear of inflation and higher mortgage rates was offered as an explanation Tuesday for a seemingly incongruous rise in home resales last month.

In California, the housing market benefited from the continuing economic recovery, which appeared to be neutralizing the effect of rising interest rates on sales, said Leslie Appleton-Young, vice president of research and economics for the California Assn. of Realtors.

Home resales in the state were up 0.7% for September, rising for the second consecutive month, the trade group reported. The September sales pace declined 1.8% from the September, 1993, annualized rate.

Nationwide, the robust economy also offset rising mortgage rates and helped boost home resales 1% in September, according to the National Assn. of Realtors.

Consumer Confidence

From a monthly survey of 5,000 households. Index: 1985=100

October 1994: 87.6

Source: Conference Board