Faltering Consumer Confidence on Both Sides of Atlantic

02 September 2004

Disappointing figures from separate surveys reveal concerns for the economy both among US and UK consumers.

  • America's Consumer Confidence Index, compiled by private research group the Conference Board, plummeted 7.5 points in August to 98.2 from the previous month's 105.7.

    Hard on the heels of rebounding figures for US consumer spending [WAMN: 31-Aug-04], the confidence index is released amid fears for the outlook of jobs.

    Those respondents believing jobs are 'plentiful' fell to 18.1% from 19.7% last month, while 20.1% view business conditions as 'bad', up from 19.1%.

    Analysts such as Lynn Franco, director of the Conference Board's Consumer Research Center, believe the sluggish job market has restrained confidence: "Until the job market and pace of hiring pick up, this cautious attitude will prevail."

    Although the index reading falls far short of the expected 103.5, not all economists are concerned. Investment banking firm Wachovia Securities' Mark Vitner thinks the index will pick up again in September.

  • Meanwhile, on the other side of the Atlantic, August's Consumer Confidence Survey for the UK by GfK Martin Hamblin reveals the year's lowest level of minus 5.

    The UK public appears to foresee a gloomy future for the economy, with expectations for the year ahead slipping for the first time in three months to minus 17. Perceptions of the last twelve months did not fare any better, down six points to minus 24.

    The Major Purchases Index slumped to plus 7, down from plus 11 in July, attributed to the five recent hikes in interest rates. Perceptions of whether now is a good time to save, however, have increased slightly to plus 22 from plus 21.

    Data sourced from: New York Times and Daily Research News Online; additional content by WARC staff