Consumer Confidence Still Sagging
The Conference Board's consumer confidence index fell again this month -- another sign that the recovery is weak.
The New York-based group said Tuesday that the index, which measures attitudes about current economic conditions, fell for the third consecutive month.
The index dropped to 72.7 at the beginning of September, from 76.1 last month. The base level, 100, was established in 1985.
"People are still fighting the unemployment situation," said Peter Reed, vice president and head of consumer lending at First National Bank of Chicago. "We don't see strong evidence of a healthy emergence from this recession."
Low Confidence Hurts Sales
The drop caught some bankers by surprise because of recent signals that the sluggish economy has started to rebound. Declining confidence, they said, translates to sluggish retail sales.
"I certainly don't think it's good news," said Gilbert Benz, an economist at Swiss Bank Corp.. "We have yet to see any signs of sustainable strength from consumers."
The monthly survey contained one sign of hope, however. A greater number of people this month said they expect to buy a car or home in the next six months.
Prompted largely by falling interest rates, 7.1% of 5,000 people interviewed said they plan to buy a car by early next year, compared with 6.5% in August.
Another 3.4% said they plan to buy a home, up from 2.9% last month.
Despite the midrange optimism about auto and home buying, lenders and economists agree that consumers are waiting for employment levels to improve before they commit dollars to purchases.
The survey found only 7.5% of respondents saying jobs are "plentiful," while 40% said they are "hard to get.
The data on job attitudes are the most negative registered since the 1982 recession, the board said.