US Consumer Confidence Falls for Second Month

30 September 2004

Amid concerns about slow job hiring and current US economic conditions, the New York-based Conference Board's Consumer Confidence Index has dropped for a second month, from 98.7 in August to 96.8.

Confidence in the current state of the economy has diminished, with the present-situation index falling from 100.7 last month to 95.5. Says the Conference Board's Lynn Franco: "The recent declines in the index were caused primarily by a deterioration in consumers' assessment of employment conditions."

Respondents claiming jobs are 'hard to get' rose from 26% to 28.3%, while just 16.8% regarded jobs as 'plentiful' -- down from 18.4%.

Expectations for the state of the economy over the next six months edged slightly higher to 97.6 from 97.3 and consumers also viewed future personal incomes in a more favorable light, with 20% expecting a rise in the next six months compared with 19.7% in August.

The outlook for future job prospects was more variable. Respondents predicting a fall in job openings climbed to 16.1% from 15.1%, while those forecasting an increase in the pace of hiring rose from 16.3% to 17.7%.

Economists are concerned that the slump in confidence could negatively impact on consumer spending -- an outcome that may already be taking effect as the percentage of potential car buyers dipped to 5.4% from 6.6% last month according to the Conference Board.

The fall in the Confidence Index echoes the recent findings of the University of Michigan's preliminary consumer sentiment index, which fell to 95.8 from 95.9 in August.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff