Consumer Confidence, Midwest Manufacturing Reports Show Declines

Two private economic reports focusing on consumer confidence and manufacturing in the heavily industrial Midwest showed declines in September.

The Conference Board said that its consumer confidence index fell to 76.8 from 81.7 in the previous month – its lowest point since the end of the war in Iraq. At the same time the Institute for Supply Management said that its Chicago-area factory index fell to 51.2 in September from a reading of 58.9 the previous month.

Consumer confidence was hit hard by concerns about the inability of the economy to create new jobs, the board said in its release. The percentage of people who saw jobs as “hard to get” rose to 35.3%, the highest rate since December 1993.

“Lack of improvement in labor market conditions continues to dampen consumers’ spirits,” said Lynn Franco, director of the Conference Board’s Consumer Research Center.

Franco added that despite the decline in September, most consumers remain “cautiously optimistic about the outlook for the next six months.”

The decline in ISM’s Chicago index did not indicate a contraction in manufacturing in the Chicago area, but did reflect slower-than-expected growth.

In ISM indexes, figures over 50 indicate growth, the larger the number, the faster the rate of growth.

Economists had expected a decline in the index to 57, Bloomberg News reported.

The ISM-Chicago report is often used as a gauge of the direction of manufacturing nationwide.