Job Fears Eroding Confidence

Don Hogsett, September 6, 2004

Weighed down by growing anxiety about a lackluster jobs market, consumer confidence tumbled 7.1 percent during August — heading south after four straight months of solid gains — to a current reading of 98.2 from 105.7 in July, The Conference Board reported.

After climbing an impressive 19.4 percent between April and July, confidence levels reversed course and skidded in August as fears about a worsening jobs market gnawed at consumer sentiment, the business think tank reported.

Confidence declined in every region of the nation, and took down consumer buying plans as well. Consumers said that over the past few months they plan to buy fewer homes, cars, carpets and major appliances, and take fewer vacations.

“The slowdown in job growth has curbed consumers' confidence,” said Lynn Franco, director of The Conference Board's Consumer Research Center. “The level of consumer optimism has fallen off and caution has returned. Until the job market and pace of hiring picks up, this cautious attitude will prevail.”

Weighing in on current conditions, consumers were less upbeat than last month. Those who said business conditions are “good” declined to 23.2 percent from 25.2 percent. Correspondingly, the number who said conditions are “bad” rose to 20.1 percent from 19.1 percent.

Gauging the jobs market, the number who said jobs are “plentiful” decreased to 18.1 percent from 19.7 percent. The number who claimed jobs are “hard to get” was virtually unchanged at 25.8 percent, compared with 25.7 percent in July.

Going forward, consumers have lowered their expectations for the next six months. Those anticipating that conditions will worsen increased to 8.8 percent from 7.1 percent. The number who expect conditions to improve declined to 20.1 percent from 23 percent. As for the crucial jobs outlook, the number who said they expect fewer jobs to become available increased to 15.4 percent from 13.5 percent. And the number who expect more jobs to open up skidded to 16.2 percent from 19.5 percent.

Consumer confidence by region

Source: The Conference Board
New England -20.0%
Middle Atlantic -4.8
East North Central -5.9
West North Central -15.2
South Atlantic -11.2
East South Central -4.9
West South Central -0.2
Mountain -5.2
Pacific -7.7

Consumer Buying Plans August
Plans to purchase over the next six months

Source: The Conference Board
Homes -12.2%
Carpets -11.7
Cars -5.9
Major appliances -4.6
Vacation -0.7

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