Index falls for third consecutive month

Don Hogsett, September 2, 2002

Hammered by a spotty economy and a soft employment outlook, consumer confidence fell for a third straight month in August, skidding down to a reading of 93.5 from a July level of 97.4

But consumers were sending out mixed signals — they don't like what they see, they're still apprehensive about the future, and they're still planning to spend money. Buying plans were largely up for the month, according to the national canvass of 5,000 U.S. households.

And in a strong suggestion that those who have still have, and those who don't, don't, plans to buy a new car were up, while plans to buy a used car fell. Similarly, the number of Americans planing a foreign vacation rose, while the number who plan to take a U.S. vacation declined.

With mortgage rates at historically low levels and housing prices appreciating rapidly, plans to buy a home climbed during the month to 4.2 percent of those surveyed from 3.8 percent in July. In another home-related category, major appliances buying plans were also up.

With consumers still rattled about the state of the overall economy, confidence now stands at its lowest level since November 2001, said Lynn Franco, director of The Conference Board's Consumer Research Center.

Assessing the present situation, consumer sentiment weakened to a reading of 92.0 in August from 99.4 in July. And the number of those who described business conditions as "good" fell to 16.6 percent from 20.2 percent a month ago. Expectations for the next six months were mixed.

Consumer confidence by region

New England -7.8%
Middle Atlantic -8.1
East North Central -0.3
West North Central -9.0
South Atlantic -9.0
East South Central +1.6
West South Central -2.0
Mountain -2.6
Pacific -0.1

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