US consumers grew decidedly more pessimistic about the nation's economic recovery in September, seeing worsening business and job market conditions, a key survey showed today.
The Conference Board, a business research firm, said its consumer confidence index dropped to 48.5 points from 53.2 in August, when sentiment had unexpectedly improved after two months of decline.
The sharp September slump was unexpected. Most analysts had predicted the index would weaken only slightly, to 53 points.
'Overall, consumers' confidence in the state of the economy remains quite grim,' Lynn Franco, the firm's research director, said in a statement.
She attributed September's pull-back in confidence to 'less favourable business and labour market conditions', coupled with a more pessimistic short-term outlook.
The Conference Board's consumer confidence survey is considered a bellwether on consumer spending, which drives about 70% of the country's economic activity.
Franco noted that with so few consumers expecting conditions to improve in the near term, the pace of economic growth was not likely to pick up in the coming months.
The September reading was the lowest since February as consumers grapple with weak business conditions and high unemployment near 10% in an economy struggling to recover from the worst recession in decades.
Separate housing figures painted a mixed picture. The S&P/Case-Shiller composite index of 20 cities declined 0.1% in July from June on a seasonally adjusted basis, as expected. Unadjusted, the index gained 0.6%, more than the 0.4% forecast increase.
