NEW YORK — Americans’ worries about job security flared up in September, causing a widely watched barometer of consumer confidence to dip unexpectedly and raising more concern about the upcoming holiday shopping season and the overall economic recovery.
The New York-based Conference Board, a private research group, said that its consumer confidence index dipped to 53.1 in September, down from the revised 54.5 reading in August. Economists surveyed by Thomson Reuters had expected a reading of 57.
The index had enjoyed a three-month climb fuelled by signs that the economy might be stabilizing. That followed a historic low in February of 25.3 and a bumpy road after June as rising unemployment has caught up with shoppers.
A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.
While the confidence index has doubled from the historic low in February, it’s still about half of the historic average and below the 61.4 level right before the collapse of Lehman Brothers last fall.
Paul Dales, U.S. economist at Capital Economics Ltd, said that despite a rally in the stock market, shoppers are fixating on the job market and wages.
“Falling employment and incomes are undermining confidence and are likely to continue to do so,” Dales wrote in a report released Tuesday. “Confidence is set to remain at fairly subdued levels,” adding that consequently consumer spending will remain modest.
Mark Vitner, senior economist at Wells Fargo, noted that the unexpected decline in confidence raises concerns about holiday spending.
“Last year, consumers were shellshocked as they worried about what might happen to the economy. Today, shoppers . . . don’t have the means to step up spending,” Vitner said.
Meanwhile, The Conference Board of Canada reported consumer confidence in Canada is on the rise, increasing for the seventh straight month in September. The monthly survey found confidence rising in many of the key indicators, including sentiments among Canadians about their finances, job prospects and about their ability to make big purchases.
The index rose 2.5 points to 90.9 out of 100, the seventh consecutive monthly bump, something that has not happened since 2002.