NEW YORK — Americans’ view of the economy turned grimmer in September amid escalating job worries, falling to the lowest point since February.
The downbeat report was released Tuesday on the same day a survey of chief executive officers was released that showed dimming optimism about business. The Business Roundtable’s poll indicated that executives weren’t as optimistic about sales growth as they were in June, suggesting some are putting plans to hire more workers on hold.
The Conference Board, based in New York, said its monthly Consumer Confidence Index now stands at 48.5, down from the revised 53.2 in August. Economists surveyed by Thomson Reuters were expecting 52.5.
The reading marked the lowest point since February’s 46.4. It takes a reading of 90 to indicate a healthy economy - a level not approached since the recession began in December 2007.
Economists watch confidence closely because consumer spending accounts for about 70 percent of U.S. economic activity and is critical to a strong rebound.
The index - which measures how shoppers feel about business conditions, the job market and the next six months - had been recovering fitfully since hitting an all-time low of 25.3 in February 2009, but Americans are just as downbeat as they were a year ago.
In September 2009, the index stood at 53.4. Since then, it has mostly hovered in a tight range between the mid-40sand the high 50s. May 2010 was the peak, at 62.7.
One portion of the index, which measures how shoppers feel now, decreased to 23.1 in September from 24.9. The other, which measures consumers’ assessment of economic conditions over the next six months, fell to 65.4 from 72.0.
“Overall, consumers’ confidence in the state of the economy remains quite grim,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. “And, with so few expecting conditions to improve in the near term, the pace of economic growth is not likely to pick up in the coming months.”
Fears had been easing that the economy isn’t heading toward a double-dip recession amid a fresh batch of economic reports. While companies aren’t making lots of job offers, far fewer people are applying for unemployment, according to the latest figures from the Labor Department. And the nation’s trade deficit narrowed in July, due to a bigger appetite overseas for American exports.
Such reports fueled September’s stock rally, which put the Dow Jones industrial average back to about even for 2010. But Tuesday’s Conference Board’s report made investors jittery, though major indexes recouped much of their losses as traders were encouraged by another flurry of corporate deals.
People are grappling with unemployment that’s stuck at nearly 10 percent. Dramatic improvement in hiring isn’t expected to happen until corporate executives have more confidence to add workers. And the latest poll of CEOs by Business Roundtable indicates that won’t be happening anytime soon.
Two-thirds of the CEOs that Business Roundtable surveyed in September expected sales to grow over the next six months. That’s down from 79 percent who said they expected sales growth in June.
The group is an association of CEOs of big U.S. companies.
The Consumer Confidence Index is based on a random survey mailed to 5,000 households from Sept. 1 to Sept. 21.
Business, Pages 27 on 09/29/2010