NEW YORK — Americans’ confidence in the economy rose only slightly in October from September, according to a monthly survey, as Americans continue to grapple with job worries.
The weak outlook comes in the face of a rebounding stock market and underscores challenges retailers face as they prepare for the Christmas shopping season, which is expected to see only modest gains from a year ago.
The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index rose to 50.2 from a revised 48.6 in September. Economists surveyed by Thomson Reuters expected a reading of 49.2.
September’s index marked its lowest since February and was sharply down from 53.2 inAugust.
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 marketand the next six months, had been recovering fitfully since hitting an all-time low of 25.3 in February 2009.
But while the stock market has been on an upward path, confidence has been moving sideways. In October 2009, the Consumer Confidence index stood at 48.7. Since then, it has mostly hovered in a tight range between the mid-40s and the high 50s. May 2010 proved tobe the only exception at 62.7, but even that is weak.
One component of the index, which measures how shoppers feel now about the economy, increased slightly to 23.9 in October from 23.3. The other measure, which assesses consumers’ outlook over the next six months, improved to 67.8 from 65.5.
“Consumer confidence ... is still hovering at historically low levels,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. “Consumers continue to be quite concerned about the short-term outlook. Both present and future indicators point toward more of the same in the coming months.”
While fears have eased about the economy heading toward a double-dip recession, companies aren’t making a lot of job offers. In fact, in September, unemployment remained stuck at 9.6 percent, but the Labor Department’s job report also showed a net loss of 95,000 jobs because of rampant layoffs of teachers and other local government workers that offset hiring in the private sector.
Meanwhile, the outlook for housing is growing grimmer. The Case-Schiller housing price index showed Tuesday that home prices are weakening around the country in major metro areas, and the National Association of Realtors said Monday that home sales remain weak compared with where they were just a year ago.
The Conference Board survey, based on a random survey mailed to 5,000 households from Oct. 1 to Oct. 19, showed shoppers’ continued worries about jobs. Those claiming jobs are “hard to get” rose to 46.1 percent from 45.8 percent, while those stating jobs are “plentiful” decreased to 3.5 percent from 3.8 percent.
Consumers were mixed about future job prospects. The percentage of consumers anticipating fewer jobs in the months ahead declined to 22.0 percent from 22.6 percent. However the percentage anticipating more jobs declined to 14.1 percent from 14.5 percent.
Business, Pages 21 on 10/27/2010