Sep 29, 4:40 PM (ET)
By ANNE D'INNOCENZIO
NEW YORK (AP) - Concerns that consumers won't help drive a speedy and strong economic recovery only escalated Tuesday after an influential barometer of confidence fell unexpectedly in September.
The Conference Board's Consumer Confidence survey showed worries about job security seem to be offsetting any enthusiasm about rising home values and stocks.
"Last year, consumers were shellshocked as they worried about what might happen to the economy," said Mark Vitner, senior economist at Wells Fargo. "Today, shoppers ... don't have the means to step up spending."
The Conference Board, a private research group, said its confidence index dipped to 53.1 in September, down from a revised 54.5 in August. Economists surveyed by Thomson Reuters had expected a reading of 57.
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Among the worrisome signs in the Conference Board's release were that shoppers' spending intentions declined for big-ticket purchases: cars, homes and major appliances. The report confirmed that "the consumer sector will not be much of a driver of the recovery beyond the third quarter, when auto sales spiked in response to the temporary Cash for Clunkers program," according to IHS Global Insight Chief U.S. Financial Economist Brian Bethune.
The index, which hit a historic low of 25.3 in February, had enjoyed a three-month climb from March through May fueled by signs that the economy might be stabilizing. The road has been bumpier since June as rising unemployment has caught up with shoppers. Many economists expect confidence to be stuck at the current levels during the critical holiday shopping season.
A reading above 90 means the economy is on solid footing. Above 100 signals strong growth.
While the confidence index has doubled from the February low, it's still about half of the historic average and below the 61.4 level right before the collapse of Lehman Brothers last fall.
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Recent economic data, from housing to manufacturing, has offered mixed signals but some evidence that an economic recovery might be slow.
According to a report issued Tuesday, the Standard & Poor's/Case-Shiller home price index of 20 major cities rose 1.2 percent from June to a reading of 143.05. Though home prices are still 13.3 percent below July a year ago, the annual declines have slowed in all 20 cities for the sixth straight month.
That positive news followed a Commerce Department report Friday that noted that sales of new homes inched up only 0.7 percent last month, below estimates. Sales have risen 30 percent from the bottom in January. Yet they remain about 70 percent below their peak of four years ago.
The big concern for consumers is the job market. Vitner said that while layoffs have slowed, hiring hasn't picked up.
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Economists expect holiday sales to be at best flat from a year ago, the weakest holiday season since at least 1967 when the Commerce Department started collecting the data.
The consumer confidence survey, which was sent to 5,000 households and had a cutoff date of Sept. 22, showed lingering worries about overall business conditions. Those fears resonated on Main Street.
Chicagoan Shawn Chambers said she's been looking for a second part-time job since August 2008.
"Jobs are hard to find, the ones you have are hard to keep. And money's tight," she said. "They're laying people off, and I don't know if I'm next."
Chambers, 35, said her work as a market researcher covers most of her bills. But she's planning to cut holiday spending on everyone except her 4-year-old son and her mother.
"Anybody else, they're going to get a 'Merry Christmas' and a 'Have a nice day,'" she said.
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AP Retail Writer Ashley M. Heher in Chicago contributed to this report.
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