U.S. Consumer Confidence Sees Surprising Drop

Worries about a tight job market overshadowed improving economic conditions.

Consumer confidence fell slightly in September as worries about a tight job market overshadowed improving economic conditions, the Conference Board reported on Sept. 29.

The consumer confidence index, which had improved in August, dipped in September to 53.1 from 54.5 in August.

"Consumers viewed both current business conditions and the labor market less favorably than last month," said Conference Board research director Lynn Franco. "While not as pessimistic as earlier this year, consumers remain quite apprehensive about the short-term outlook and their incomes. With the holiday season quickly approaching, this is not very encouraging news."

Those claiming business conditions are "bad" increased to 46.3% from 44.6%, while those claiming conditions are "good" increased to 8.7% from 8.5%.

The survey found consumer fears growing about the job market. Those claiming jobs are "hard to get" increased to 47% from 44.3%, while those claiming jobs are "plentiful" decreased to 3.4% from 4.3%.

The survey "remains consistent with a recessionary economy," said Scott Hoyt at Moody's Economy.com. Hoyt said it was "disturbing" to see consumer pessimism about the job market and added: "This could foreshadow larger job losses than currently expected."

"The end of the recession should produce a rebound in confidence," said Hoyt. "However, with consumer fundamentals so weak, that rebound will come only slowly and gradually."

Copyright Agence France-Presse, 2009

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