The Conference Board said that consumer confidence dipped slightly, down from 81.8 in August to 79.7 in September. As such, it mirrored a preliminary finding from the University of Michigan and Thomson Reuters, which was released earlier in the month. (A final reading from the University of Michigan will be released on Friday.) Even with the decline, it is clear that Americans remain more positive today than earlier this year, as the consumer confidence index had stood at just 58.4 in January.
The decline in the Conference Board measure stemmed mostly from the expectations component, which fell from 89.0 to 84.1. Individuals were still more upbeat than a few months ago. Six months ago (March), the forward-looking confidence indicator was 63.7. With that said, the deceleration in September was notable. Budget battles in Washington, higher gasoline prices, and increased borrowing costs have eaten away at sentiment this month.
Beyond those factors, surveys such as this tend to respond to pocketbook issues. In this case, the percentage of respondents expecting an increase in their incomes declined from 17.5 percent in August to 15.4 percent in September. This corresponded with an uptick in those anticipating a decrease in their incomes, up from 13.5 percent to 14.6 percent. Similarly, the percentage saying that there will be more jobs in the months ahead fell from 17.5 percent to 16.9 percent. With such concerns about the labor market, it is perhaps not a surprise that Americans remain slightly more anxious.
The percentage of respondents planning to purchase a new home rose from 5.1 percent in August to 5.9 percent to September, but that proportion remains below the percentage observed in July (6.9 percent). To be fair, house buying plans remain more positive than not, particularly when compared to earlier in the year, and the July figure was a bit of an outlier. Other buying intentions were mixed, with more Americans planning to purchase an automobile (up from 10.6 percent to 12.3 percent), but fewer of those taking the survey stating that they will buy an appliance (down from 49.0 percent to 47.7 percent).
Chad Moutray is the chief economist, National Association of Manufacturers.