Consumer Confidence Falters

Don Hogsett, Staff Staff, September 4, 2006

With Americans growing increasingly fearful about the outlook for jobs, consumer confidence tumbled by almost 7% in August, skidding down to its lowest level in 9 months and reaching a new low for the year and the past 13 months, The Conference Board reported.

The bellwether gauge of how Americans are feeling fell 6.9% to a reading of 99.6, down from 107.0 in July.

With higher gas and interest prices, and now increasing job woes, confidence levels have now fallen by 9.3% from a 13-month high of 109.8 put up only 4 months ago, in April.

“Consumer confidence lost significant ground in August and is now at its lowest level this year,” said Lynn Franco, director of the business think tank's Consumer Research Center.

“Less favorable business conditions coupled with a less favorable job scenario have resulted in the largest one-month decline in confidence since Hurricane Katrina last year,” she noted. “Looking ahead, the glass remains half empty as consumers are growing increasingly more pessimistic about the short-term outlook.”

Driving the big one-month drop was a deterioration in the way Americans view the job market, with the number who think jobs are plentiful falling to 24.4% in August from 28.6% in July. Similarly, the number who say jobs are hard to get rose to 21.1% from 19.6% the month before.

The number who say business conditions are good declined to 26.1% from 27.3%; the number who think they are bad increased to 16.7% from 15.0%. The outlook for the next 6 months grew more negative, with the number who expect business conditions to worsen increasing to 12.9% from 10.9% in July.

Buying plans in August
Plans to purchase over the next six months

Source: The Conference Board
Homes +2.6%
Carpets 2.0
Cars -1.4
Major Appliances 14.6
Vacation 8.2

Confidence by region

Region % change
Source: The Conference Board
New England -7.0%
Middle Atlantic -9.5
East North Central -0.2
West North Central -19.8
South Atlantic -14.3
East South Central -11.4
West South Central 4.1
Mountain -6.4
Pacific -5.3

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