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Job Fears Weigh on Consumer Sentiment

September 29, 2004|From Associated Press

Continued job worries resulted in an unexpected decline in consumer confidence in September, the second consecutive monthly drop, a New York-based private research group said Tuesday.

The consumer confidence index fell to 96.8 from a revised reading of 98.7 in August, according to the Conference Board. Analysts had expected a reading of 99.5.

"Soft labor market conditions have clearly taken a toll on consumer confidence," said Lynn Franco, director of research for the organization. "Still, expectations for the next six months are virtually unchanged from August."

Economists closely track consumers' outlook on the economy and employment because consumer spending accounts for two-thirds of all U.S. economic activity.

The confidence index, which was as high as 144.7 in May 2000 when the job market was flourishing, has been volatile since the economy emerged from recession in November 2001. It fell to 64.4 in March 2003 after the U.S.-led invasion of Iraq but then began what had been a gradual but inconsistent rise as the job-market recovery remained tenuous, Franco said. It was 105.7 in July.

The present situation index, one component of the consumer confidence reading, fell to 95.5 from 100.7 in August. The expectations index, which measures consumers' outlook over the next six months, edged up to 97.6 from 97.3 last month.

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