The Conference Board’s Consumer Confidence Index, which had rebounded in August, plummeted in September. The Index now stands at 86.6 (1985=100), down from 105.5 in August. The Present Situation Index decreased to 108.9 from 123.8. The Expectations Index fell to 71.7 from 93.3 last month.
“Hurricane Katrina, coupled with soaring gasoline prices and a less optimistic job outlook, has pushed consumer confidence to its lowest level in nearly two years (81.7 in October 2003)and created a degree of uncertainty and concern about the short-term future,” said Lynn Franco, director of The Conference Board’s Consumer Research Center. “Historically, shocks have had a short-term impact on consumer confidence, especially on consumers’ expectations. Fuel prices remain high, though they have retreated in recent days, and when combined with a weaker job market outlook, will likely curb both confidence and spending for the short-run. As rebuilding efforts take hold and job growth gains momentum, consumers’ confidence should rebound and return to move positive levels by year-end or early 2006.”
Consumers’ overall assessment of ongoing conditions was considerably less favorable in September. Those claiming business conditions are “good’ declined to 25.2 percent from 29.7 percent. Those claiming conditions are “bad” increased to 17.7 percent from 15.1 percent.
The employment picture was also less upbeat. Consumers saying jobs are “hard to get” increased to 25.4 percent from 23.1 percent, while those claiming jobs are “plentiful” rose to 20.1 percent from 23.6 percent.
For the first time since October 2001, consumers claiming jobs are plentiful outnumber those claiming jobs are hard to get.