By Martin Crutsinger, AP
WASHINGTON–U.S. consumer confidence deteriorated in September after hitting the highest level in nearly seven years in August. But economists said the fall appears to be a temporary slip that shouldn’t dampen consumer spending in the coming months.
The Conference Board reported Tuesday that its confidence index fell to 86.0, the lowest point since a May reading of 82.2. It was the first decline after four months of gains and followed a revised 93.4 in August, which had been the highest reading since October 2007, two months before the Great Recession officially began.
Economists had expected a slight decline in September after the index hit a nearly seven-year high, but the size of the drop surprised them. Some suggested that the result may have been influenced by heightened global tensions as the conflict against Middle East militants widens.
Analysts said consumers should have felt better during the month, in light of a number of positive economic developments, including a sizable drop in gasoline prices in recent weeks.
Naroff said he would only be concerned if he began to see reports indicating a weakening economy. He predicted that confidence would rebound and that the September slip would have no effect on consumer spending.
Both the gauge that tracks consumers’ feelings about current conditions and the reading of future expectations fell in September.
The September decline stood in contrast to a separate consumer sentiment survey released last week by the University of Michigan. Its index climbed in September to the highest level since July 2013.
It is not unusual for the two confidence gauges to show different readings in any given month since the surveys are influenced by events occurring when the responses are being collected, Naroff said.
The fall in the Conference Board index was the biggest monthly drop since October 2013, when consumers were rattled by the 16-day partial federal government shutdown.
Various analysts said they expect confidence to turn higher in the coming months, especially if other data such as unemployment reveal strength. Economists are looking for this Friday’s report to post a healthy gain of 215,000 jobs for the month.