Consumers' confidence remained weak in September after dropping to a post-recession low during the month before. That's left economists to wonder just what it'll take to get Americans feeling good about the economy again.
A survey of consumer confidence shows that Americans who were worried in August because of a downgrade of U.S. long-term debt, wild stock markets swings and other concerns, continue to be spooked. Economists say the problem is that not much has changed to make consumers feel financially secure. The stock market is still volatile. Worries about the global economy persist. And perhaps worst of all for confidence, U.S. jobs are still scarce.
"We are well below where we should be, and that's because the unemployment situation is so bad," said Paul Dales, senior U.S. economist at Capital Economics. "You have to have a huge fall in the unemployment rate."
The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index was at 45.4 in September. The number is slightly above the revised reading in August of 45.2, which was the lowest since April 2009. A reading of above 90 indicates the economy is on solid footing.
"The pessimism that shrouded consumers last month has spilled over into September," said Lynn Franco, director of the Conference Board Consumer Research Center in a statement.
Economists, which watch the index closely because consumer spending accounts for about 70 percent of U.S. economic activity, say it will take at least a year for consumers' confidence to improve. The problem, they say, is that consumers still feel like they're in a recession.
It's not hard to see why consumers are freaked out about the U.S. economy. Net job creation came to a halt in August in the U.S. The unemployment rate was flat at 9.1 percent. Home prices remain weak. And consumers are facing higher prices for everything from food to clothing as retailers try to offset their rising costs for labor and materials.
Consumers also don't feel good about their prospects. Those claiming jobs are "hard to get" increased to 50.0 percent, from 48.5 percent in the Conference Board's survey. And the proportion of consumers anticipating an increase in their income declined to 13.3 percent from 14.3 percent.