American consumer confidence has hit a five-year low after the terrorist attacks on New York and Washington, according to the Conference Board.
The New York-based business research group’s influential consumer confidence index tumbled from August’s reading of 114 [WAMN: 29-Aug-01] to 97.6 – the lowest since January 1996 and the biggest monthly drop since the recession of the early 1990s (though the index remains at a higher level than a decade ago).
Data for the index were collected from September 1–21 , though mostly after the devastation of September 11, revealed Conference Board economist Ken Goldstein.
The figures strengthen fears that so far buoyant consumer spending will decline in the wake of falling markets and job cuts, dragging down the economy as a whole (of which it makes up two-thirds).
“Much depends on how far and for how long consumers’ confidence is depressed by the impact of the disaster on stock prices,” commented Ian Shepherdson, an economist at High Frequency Economics. “At the moment, this is unknowable.”
News source: Financial Times