A reading of 90 indicates a healthy economy on the index, which measures how Americans feel about business conditions, the job market and the next six months. But the index hasn’t approached that level since the recession began in December 2007. In fact, two years after the recession officially ended in June 2009, consumer confidence is still fragile.
“Consumers are growing increasingly worried about the near-term economic outlook,’’ says Mark Vitner, senior economist at Wells Fargo.
Jim Horseman, 55, a railroad engineer from Avon, Ohio, is among those consumers who remain queasy about the economy. He said he needs to buy a new car but is putting it off until next year.
“I’m not giving up my money. I’m holding on to my savings,’’ Horseman says. “I feel much safer with my money in the bank making no interest than not having it.’’
Isaac Burrows, 24, who works on commission as a salesman at a Clarks shoe store in downtown Indianapolis, also is concerned. He said he sees troubling signs of economic trouble at his job. A few years ago, he could sell $10,000 worth of shoes a week; now he’s lucky if he can sell half that.
“There haven’t been any real signs that would give you that confidence,’’ Burrows says.
Still, economists had expected the confidence index to edge up because consumers are paying less at the pump.
Consumers had been hurt by rising gas prices that neared $4 per gallon in late April and early May, leading many to cut back on spending for everything from televisions to clothes. But since the Memorial Day weekend, gas prices have fallen to a national average of $3.57 per gallon.
Lynn Franco, director of The Conference Board Consumer Research Center, said rising gas prices have much more of an impact on confidence as they go up than when they fall. Besides, the fact that there is less pain at the pump comes as there is a steady drumbeat of other economic news that ranges from mildly encouraging to downright bad.
