Index declines again but pace slackens

Retail Editor 3, Don Hogsett, September 30, 2002

With a weak labor market and fears of joblessness weighing down Americans, consumer confidence declined in September for a fourth straight month, but at a far slower pace than in the three prior months, The Conference Board reported.

And, in another sign that points toward a recovery in consumer sentiment, while consumers still don't like current economic conditions, they're growing more bullish about the future.

The benchmark Consumer Confidence Index dipped by 1.2 points to a level of 93.3 from 94.5 percent. But while still on a downward slope, the decline was far less steep than the 2.9 point drop in August; the deep 8.9 point drop in July, or the 4.0 point decline in June that began the four-month-long slide in consumer sentiment.

"Weak labor market conditions continue to erode confidence," said Lynn Franco, director of The Conference Board's Consumer Research Center. "But while consumers are not as positive about current business conditions, they are more optimistic about the outlook than last month. Historically, this trend is prevalent during a recovery."

Assaying current business conditions, consumers were somewhat mixed, and the number rating conditions "good" increased to 18.2 percent from 16.7 percent. But the number who called conditions "bad" also increased, to 23.3 percent from 21.8 percent.

The modestly encouraging news came from the short-term outlook, where consumers are growing more optimistic. Fewer expect an improvement in business conditions in the next six months, 21.5 percent, down slightly from 22.2 percent. But at the same time, the number who expect conditions to worsen fell to 9.6 percent from 10.0, The Conference Board noted.

Consumer confidence by region

New England +2.2%
Middle Atlantic +10.8
East North Central + 4.3
West North Central +9.3
South Atlantic -1.7
East South Central +12.6
West South Central -6.2
Mountain +8.1
Pacific -2.0

Consumer Buying Plans — September
Plans to purchase over the next six months

Source: The Conference Board
Homes -26.7%
Carpets +3.8%
Major Appliances -17.6%
New Car -34.1%
Used Car +17.4%

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