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Consumer confidence reaches 11-year low

Consumer confidence crumbled last month — hit first by mounting job woes, and then finished off by a terrorist attack on the World Trade Center — sinking to its lowest level in 11 years, The Conference Board reported.

Already anxious consumers, worried about a steadily worsening jobs outlook and mounting layoffs, turned formidably bearish in September, growing increasingly pessimistic about the outlook for the next six months.

The widely watched Consumer Confidence Index plunged by 14.6 percent to a current reading of 97.6, down from 114.0 in August. It was the biggest one-month decline since October 1990, the business think tank reported.

Making matters even worse, most of the damage to consumer confidence appears to have been done by the worsening state of the economy, and the employment outlook in particular, rather than the terrorist attack on New York's twin towers. Most of September's negative results were compiled before the Sept. 11 attack on the World Trade Center, and results that came in afterwards were little different, the Conference Board reported. "While survey results conducted before and after the terrorist attacks on Sept. 11 differed slightly, there was no reversal in the downward trend of the Index."

The further erosion, said The Conference Board, "continues to be fueled by deteriorating labor market conditions and weakening business conditions." Consumers rating business conditions as favorable fell to 22.0 percent from 27.7 percent. And the percentage of consumers claiming jobs are "hard to get" increased to 18.5 percent from 16.0 percent.

And it gets even worse. Expectations for the next six months are even more pessimistic. The percentage of consumers anticipating business conditions will worsen jumped up to 15.0 percent from 10.7 percent the prior month.

Consumers were just as concerned about their income. Today, only 21.1 percent expect an increase in family income, down from 23.2 percent a month ago.

Lynn Franco, director of The Conference Board's Consumer Research Center, commented, "As the economic ramifications of Sept. 11 continue to reverberate in the coming weeks and months, and the number of layoffs continues to rise, the economy faces tougher times ahead."

Consumer confidence by region

New England -12.0
Middle Atlantic -18.0
East North Central -14.8
West North Central +3.6
South Atlantic -12.4
East South Central -4.2
West South Central -13.8
Mountain -8.6
Pacific -10.2

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