The Conference Board's Consumer Confidence Index fell to 96.8 in September, down by 1.9 points from the revised 98.7 in August. This is the second consecutive decrease for the index. The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households.
Confidence was mixed across both portions of the Conference Board index. The Present Conditions index was responsible for the overall drop in the index, declining 5.2 points to 95.5 in September. This index measures how consumers perceive the current state of the economy.
The Expectations portion of the index, a measure of future economic activity, was nearly unchanged, increasing slightly to 97.6 in September from 97.3 in August.
The University of Michigan's Consumer Sentiment Index, a comparable index, also dropped in September, falling to 94.2 from 95.9 in August. The component indices were also lower. The Present Conditions portion of the index fell 4.2 points to 103.7 in September, while the Expectations index decreased slightly to 88.0 from 88.2 in August.
Consumer confidence is weakened by several factors. Labor market reports in the last couple of months have been weak. Gasoline prices are relatively high and unstable. The stock market has been unsteady and trending downward for most of the year. In addition, household debt is high and weighs on consumer spending.
Despite recent declines, consumer confidence is still expected to gradually improve over time, provided that energy prices moderate and job growth strengthens. Since consumer spending accounts for two-thirds of the U.S. economy, consumer confidence is a closely watched economic indicator.
Sources: www.conference-board.com
www.economy.com
