The Conference Board's Consumer Confidence Index slipped to 48.5 in September from 53.2 in August. The September reading is the lowest since February 2010 (46.4). The historical low is 25.3, registered in February 2009. The University of Michigan Consumer Sentiment index also declined in September (66.6 vs. 68.9 in August). The decline in consumer outlook appears to be tied to the prevailing conditions in the job market. Although the recent recession officially ended in June 2009 and real GDP has posted growth for four straight quarters, the 9.6% unemployment rate in August is an elevated level playing an important role in the pessimistic outlook of consumers.
The Conference Board's survey results show that the number of respondents indicating "jobs are hard to get" moved up to 46.1% in September vs. 45.5% in the prior month. At the same time, the number responding that "jobs are plentiful" inched down to 3.8% from 4.0% in August. The net of these two indexes has a positive correlation with the unemployment rate (see chart 2). The larger net difference between the two indexes in September (42.3 vs. 41.5 in August) suggest a higher jobless rate in September.
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