Confidence Dips Slightly Among Consumers

Worries about rising interest rates and sliding stock prices pushed U.S. consumer confidence lower in September for the third straight month, but overall optimism remained high despite a retreat from record levels, the Conference Board said Tuesday.

The research group index of consumer confidence, a measure of consumers’ willingness to spend, slipped to 134.2 in September from 136.0 in August.

“Despite the September dip, confidence levels are still at historically high levels,” said Lynn Franco, director of the Conference Board’s Consumer Research Center, which publishes the group’s monthly confidence index.

But consumer spending could drop in coming months if confidence continues to wane, economists said.

The Conference Board’s latest survey showed a drop from August in the number of consumers planning to purchase new homes and big-tickets items like automobiles and major appliances in the next six months.

While jobs remain plentiful, economists blamed the erosion in consumer confidence on rising costs for mortgages and consumer credits, and a steep drop in U.S. stock prices.

The Conference Board’s report, which is based on a sample of 5,000 U.S. households, said consumer expectations about the future also weakened in September. The index’s expectation component dropped to 105.7 from 109.2 in August.

Some 7.1% of respondents said they expected business conditions to worsen in the next six months, while 16.4% expected them to improve. The rest said they expected no change.

Consumer sentiment about labor conditions in September were mixed. According to the survey, 12.5% of consumers claimed jobs are “hard to get,” down slightly from 12.7% in August. But, 48.2% of respondents said that jobs are plentiful, down from 49.4% last month.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Consumer Confidence

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

Sept.: 134.2

Source: Conference Board