Consumer Confidence Drops Off
Consumer confidence in the economy fell this month, and the decline suggests that loan demand will remain stagnant.
The New York-based Conference Board said Tuesday that its index of consumer confidence slipped to 76.3 in August, from 77.7 in July.
It was the first real decline since the end of the Gulf War, the business group said. In the survey of consumer sentiment, 100 represents the 1985 level.
Though consumers appear more positive about current economic conditions, they have grown more concerned about the outlook for the next six months. As a result, fewer people plan to buy cars and homes in the period.
Little Call for Loans
"There is no demand for loans whatsoever," said M. Timothy Moroch, senior vice president in charge of consumer credit at Peoples Westchester Savings Bank in Hawthorne, N.Y.
"We're looking for the economy to have a positive impact, and it's just not happening," said Joseph M. Scharfenberger, president of Chase Auto Finance.
"We are not seeing any significant, sustained indicator that people are buying autos in any numbers more than the past four months or so." The New Hyde Park, N.Y.-based company is a luxury auto leasing subsidiary of Chase Manhattan Corp.
Fewer Purchases Planned
The percentage of consumers who said they plan to buy a car dropped to 6.2% in August, from 6.4% in July. Those who said they expect to purchase a home fell to 2.7%, from 2.9%.
Many economists have said a slow recovery has begun. But Mr. Moroch of Peoples Westchester said, "I see nothing from my point of view to say that's a correct statement."
The Conference Board's consumer confidence index has fluctuated in a narrow range in recent months. After the war's end, the index jumped to 81.1 in March, from a sluggish 59.4 in February. Last month it was 77.7, virtually unchanged from June's 78.