Consumer confidence unexpectedly fell for a second straight month in September amid concern about jobs and rising oil prices, according to a private survey released Tuesday.
“If consumers don’t cheer up, the economy is in danger of losing traction again,” said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York.
The Conference Board’s index dropped to 96.8 from 98.7 in August. Americans were less confident about current economic conditions, even as the outlook for the next six months improved, the business research group said. Analysts had expected a reading of 99.5
“Unless jobs show respectable gains during the months ahead, it’s hard to see how consumer spending can strengthen, particularly in the wake of $50 oil,” said Sherry Cooper, chief economist at BMO Nesbitt Burns Inc. in Toronto.
The component of the index tracking assessments of current economic conditions fell to 95.5 from 100.7 in August.
“The 144,000 jobs created last month weren’t enough,” said Delos Smith, a Conference Board economist. “People are very nervous about jobs. Oil enters into it, and Iraq enters into it.”
Still, some economists were skeptical about the survey’s findings.
The report goes “against the news that we’ve seen from hiring surveys,” said Robert DiClemente, chief economist at Citigroup Global Markets in New York. “It’s possible this is an echo from some earlier sluggishness in the economy, and not necessarily indicative of what is going on.”
A gauge of optimism about the economic outlook over the next six months rose to 97.6 from 97.3 in August, and more consumers said the job market and their own income prospects will improve.
“Soft labor market conditions have clearly taken a toll on consumer confidence,” said Lynn Franco, director of the Conference Board’s Consumer Research Center. “Still, expectations for the next six months are virtually unchanged from August.”
Mark Vitner, senior economist at Wachovia Corp. in Charlotte, noted that the main index is still close to a reading of 100, which is the benchmark for “normal economic times.”
“It’s not that things are bad. They’re just not great,” said Vitner. “We’re in an in-between mode.”
The index was at 100 or better in November 1972, 1984 and 1996 when incumbent Presidents Richard Nixon, Ronald Reagan and Bill Clinton were re-elected. In 1976 and 1980 the gauge was below 100, and incumbents Gerald Ford and Jimmy Carter lost.
“The number is so close to 100 now it’s hard to say whether George Bush is hurt or not,” Smith said. “It just means a very close election.”
