The US consumers confidence on their economic optimism dropped unexpectedly in September, showed a report released on Tuesday.
The report was prepared by a private research group ‘The Conference Board’. According to the board, its index of consumer confidence declined to 86.0 this month from a revised 93.4 reported last month. The index showed that the customer confidence level recorded in August was the highest reading since October 2007, before the beginning of the 2008 great recession.
Meanwhile, the economists had forecasted the latest index to follow an upward trend to 92.8.
The present situation index, which is a gauge of assessment by the consumers of prevailing economic conditions, fell to 89.4 in September from a revised 93.9 last month, originally put at 94.6.
Meanwhile, the consumer expectations for economic activity over the next six months also dropped to 83.7 from a revised 93.1, which was first reported as 90.9. Market watchers said that the current expectation reading was the lowest since May.
Lynn Franco, director of economic indicators at The Conference Board, said, “A less positive assessment of the current job market, most likely due to the recent softening in growth, was the sole reason for the decline in consumers’ assessment of present-day conditions.”
“Looking ahead, consumers were less confident about the short-term outlook for the economy and labor market, and somewhat mixed regarding their future earnings potential. All told, consumers expect economic growth to ease in the months ahead,” Franco added.
Experts say the consumer spending has been at an uneven pace during this expansion.
The Commerce Department report on Monday showed an increase in the nominal personal spending by 0.5 percent in August after a 0.1 percent fall in July.
The plunging figures for consumer confidence have raised several questions about their spending behavior in the future.
According to the Conference Board survey, the consumers saw some amount of deterioration in the US labor markets.
In September, 15.1 percent of consumers thought employments are ‘plentiful’, down from 17.6 percent in August, which had been the highest reading since early 2008, before the beginning of great recession. Meanwhile, another 30.1 percent consumers said jobs are ‘hard to get’, with 30.0 percent saying that on July.
The US Labor Department is expected to release its employment report for the month of September on Friday. The financial analysts expect nonfarm payrolls to increase by 215,000 jobs in September, better than the 142,000 added last month.
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