The U.S. consumer confidence index dropped from 54.5 to 53.1 between August and September, representinga growing concern among Americans in relation to the economy, their job prospects, and their income. According the The Conference Board,an independenteconomic research organization thatreleases the index monthly, thereappears to befluctuationsas ithad risen a whopping seven points between July and August.
Some analysts believe that the drop could be directly related to the upcoming holiday season. As Halloween, Thanksgiving, and Christmas rapidly approach, consumers know that they will need to spend more, yet may have less money to work with. Even still, the index has witnessed an overall uptrend, having hit its lowest point in February 2009 at 25.3.
The U.S. consumer confidence index isdirectly correlated with economic growth and isutilized by the Federal Reserve to determine interest rates. It also has an effect on stock prices. The index is based on results from the surveys of 5,000 householdsand looks atthe following issues:current business conditions, business conditions for the next six months, current employment conditions, employment conditions for the next six months, and total family income for the next six months.
While the overall consumer confidence index uptrend has been apparent since February, The Conference Board notes that it has been modest compared to other more drastic up trends that follow deep recessions. It seems that while Americans are feeling a sense of optimism, they have not completely breathed their sigh of relief yet.
How would you rate your own consumer confidence? Do you feel that the economy is recovering or do we still have a long way to go?
