U.S. consumers slightly less confident in economy

Americans’ confidence in the economy fell slightly in September from August, as many became less optimistic about hiring and pay increases over the next six months. The Conference Board, a New York-based private research group, said Tuesday that its consumer confidence index dropped to 79.7 in September. That’s down from August’s reading of 81.8, which was slightly higher than previously estimated.

WASHINGTON — Americans’ confidence in the economy fell slightly in September from August, as many became less optimistic about hiring and pay increases over the next six months.

The Conference Board, a New York-based private research group, said Tuesday that its consumer confidence index dropped to 79.7 in September. That’s down from August’s reading of 81.8, which was slightly higher than previously estimated.

Consumers’ confidence is closely watched because their spending accounts for 70 per cent of economic activity. The September reading was only slightly below June’s reading of 82.1, the highest in 5 1/2 years.

While confidence has bounced back from the depths of the Great Recession, it has yet to regain a reading of 90 that typically coincides with a healthy economy.

In September, confidence fell on a dimmer outlook for the next few months. Lynn Franco, who oversees the survey, said that reflected concerns about the job market and wages. Consumers were actually more optimistic about present conditions.

“While overall economic conditions appear to have moderately improved, consumers are uncertain that the momentum can be sustained in the months ahead,” Franco said.

Amna Asaf, an economist at Capital Economics, said she believed that higher interest rates and lower stock prices contributed to the drop in confidence. But she noted that the survey concluded before last week’s decision by the Federal Reserve to make no changes to its bond buying program.

That decision sent stock prices up and interest rates down.

“We suspect that if the rebound in equity prices is sustained, along with the drop back in gasoline prices, confidence will rebound,” she said.

On Tuesday, the average U.S. price for a gallon of gas was $3.46, according to AAA. That’s eight cents cheaper than a month ago.

Recent data suggest economic growth may be slowing. Consumers spent more cautiously in August as their income barely grew.

And higher interest rates are threatening to slow home sales, just as many markets are starting to recover.

The economy added 169,000 jobs in August, a modest gain but hardly enough to signal robust job growth. The U.S. unemployment rate fell to 7.3 per cent from 7.4 per cent.

But the decline was mostly because more people stopped looking for work and were no longer counted as unemployed.

A weaker outlook for the rest of the year was a key reason the Federal Reserve decided last week to hold off on slowing its $85-billion-a-month in bond purchases.

The bond purchases have kept longer-term interest rates low, making mortgages and other consumer loans more affordable.

Many economists believe the Fed won’t reduce the bond purchases until December at the earliest.

The economy has been held back this year by tax hikes, federal spending cuts and weaker global growth. It expanded at an annual rate of 2.5 per cent in the April-June quarter. But many economists say growth is slowing in the July-September quarter to an annual rate of 2 per cent or less.

Just Posted

Shale oil producer seeking long-term river water supply

A company behind what is billed as Canada’s first commercial shale oil… Continue reading

Red Deer’s crisis line workers are busy dealing with multiple emergencies

Callers need everything from mental health counselling to their basic needs met

Pleaded guilty: Ex-Red Deer teacher gets 3 years for sex offences against kids

SASKATOON — A former Saskatoon teacher who admitted to sexual offences involving… Continue reading

Rental market picking up in Red Deer

There are fewer “for rent” signs in Red Deer than there have… Continue reading

Alberta government to partially backstop new $2 billion dollar bitumen upgrader

CALGARY — The Alberta government is providing a $440 million loan guarantee… Continue reading

2-for-1: Total lunar eclipse comes with supermoon bonus

On Sunday night, the moon, Earth and sun lined up to create the eclipse, which was visible throughout North and South America

Backlund scores OT winner for Calgary Flames in 3-2 win over Carolina Hurricanes

Flames 3, Hurricanes 2 (OT) CALGARY — Mikael Backlund scored 15 seconds… Continue reading

Glendening’s two-goal performance leads Red Wings past Oilers 3-2

Red Wings 3, Oilers 2 EDMONTON — Luke Glendening had a pair… Continue reading

New Canada Food Guide nixes portion sizes, promotes plant-based proteins

OTTAWA — The Canada Food Guide’s familiar food rainbow has been replaced… Continue reading

New Canada Food Guide nixes portion sizes, promotes plant-based proteins

Guide no longer lists milk and dairy products as a distinct food group

B.C. animators land Oscar nominations

‘Animal Behaviour’ by Vancouver’s David Fine and Alison Snowden among several Canadians on the short list

Canadian talent abound on newly revamped Vancouver Whitecaps squad

VANCOUVER — The Vancouver Whitecaps may need to stock up on maple… Continue reading

China demands US drop Huawei extradition request with Canada

China detained two Canadians on Dec. 10 in an apparent attempt to pressure Canada to release Meng

Most Read