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WASHINGTON: US consumer confidence tanked in
September to almost a two-year low amid weakening business and job
market conditions, the Conference Board said Tuesday.
The business research company
said its consumer confidence index fell to 99.8, down from a revised
105.6 in August.
The confidence reading was
sharply below Wall Street forecasts of 104.5 and was at its lowest
since hitting 98.3 in November 2005. Last month the index dropped
from 111.9 in July.
“Weaker business conditions
combined with a less favorable job market continue to cast a cloud
over consumers and heighten their sense of uncertainty and
concern,” said Lynn Franco, the group’s research director.
“Looking ahead, little economic
improvement is expected, and with the holiday season around the
corner, this is not welcome news.”
The confidence index is closely
watched by the markets as an indicator of consumer spending, which
accounts for roughly two-thirds of US economic activity.
The two sub-indexes in the
Conference Board survey also tumbled.
The present situation index
declined to 121.7 from a revised 130.1 in August and the
forward-looking expectations index fell to 85.2 from 89.2.
In the survey, the percentage of
consumers claiming conditions were “good” fell to 25.7 percent
from 26.2 percent in August and those saying conditions were
“bad” rose to 17.9 percent from 16.3 percent
The percentage who said jobs are
“plentiful” declined to 25.7 percent from 27.5 percent while
respondents saying jobs are “hard to get” rose to 22.1 percent
from 19.7 percent.
“We can find a lot of reasons
explaining the deterioration in consumer confidence: weakening in
the job market, tightening in credit conditions and the financial
crisis, declining home prices, rising gasoline prices,” said
Marie-Pierre Ripert, US economist at IXIS Corporate and Investment
Bank.
“All these factors are likely
to weigh on consumer spending in the months ahead triggering a
significant deceleration in GDP [gross domestic product] growth,”
she said.
The report was based on a survey
of 5,000 US households through September 18.
--AFP
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