Consumer pulse weak in survey

Confidence among U.S. consumers fell in September to a four-month low as Americans grew less upbeat about the outlook for employment.

The Conference Board’s index dropped to 79.7 from a revised 81.8 a month earlier that was stronger than initially estimated, the New York-based private research group said Tuesday. The median forecast in a Bloomberg survey of economists called for a drop this month to 79.9.

The decrease may reflect growing concern over Syria and the budget battle in Washington at the same time uneven employment and income growth limit consumer spending, the biggest part of the economy. A pickup in household wealth, reflecting improved property values and higher stock prices, will help ensure Americans won’t retrench, analysts said.

“The consumer is in a cautious, wait-and-see mode, with geopolitical uncertainties in the news lately as well as the looming budget battle,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Conn., who projected a reading of 79.5. “It’s not a terrible situation, but actual spending has been tepid this year.”

Estimates of consumer sentiment ranged from 76 to 83 in the Bloomberg survey of 78economists after a previously reported August reading of 81.5. The Conference Board’s measure averaged 53.7 in the recession that ended in June 2009. The cutoff date for the survey was Sept. 13, around the time President Barack Obama’s administration was considering a military strike on Syria.

The Conference Board’s barometer of consumer expectations for the next six months fell to 84.1 after 89 a month earlier. A gauge of present conditions improved to 73.2 in September from 70.9 a month earlier.

The fewest respondents since March said they expected their incomes to rise. The share dropped to 15.4 percent in September from 17.5 percent a month earlier. The share of Americans who said jobs would become more plentiful in the next six months fell to 16.9 percent from 17.5 percent.

Recent improvements in the labor market have been uneven. Employers created 169,000 jobs in August, and the prior two months’ gains were revised down, Labor Department figures showed this month.

The unemployment rate dropped to 7.3 percent, a more than four-year low, in part because workers left the labor force.

The lack of more progress in the job market was behind the decision of Federal Reserve policymakers to refrain from reducing the pace of monthly stimulus. Central bankers said they need to see more evidence of sustained economic strength.

Speculation that the Fed would begin paring the $85 billion monthly pace of bond purchases has pushed up mortgage rates, threatening to slow the recovery in housing.

More Americans indicated in Tuesday’s confidence survey that they plan to buy homes and automobiles in the next six months.

The auto industry has been thriving as Americans replace older models and take advantage of dealer incentives, some of which include interest-free financing. Ford Motor Co., General Motors Co. and Toyota Motor Corp. posted U.S. sales gains in August that beat analyst estimates.

The annualized pace of motor vehicle sales climbed to 16 million in August, the highest in almost six years, according to data from Ward’s Automotive Group.

While some consumers are spending on big-ticket goods such as new cars, they may be cutting back elsewhere.

Retailers from Macy’s Inc. to Wal-Mart Stores Inc. cut forecasts after missing their second quarter sales targets.

Clarence Otis, chairman and chief executive officer at Darden Restaurants Inc., owner of the Red Lobster and Olive Garden chains, referred to “guests who need more affordability” on a Friday earnings call. “They’ve got to do some more disciplined budgeting, and dining out is one of the things that may be paying a price for that,” Otis said.