American Consumer Mood Continues To Slip

The consumer mood has slipped in recent weeks. Consumer confidence fell last week to a four-month low as Americans grew more pessimistic about the economy and their finances.

The Bloomberg Consumer Comfort Index declined to 34.8 in the period ended September 28, the lowest reading since May 25, from 35.5. Views of the economy were also the weakest in four months, and the personal finances gauge dropped to its lowest reading since early August.

According to Bloomberg, the recent setback in sentiment has been concentrated among lower-income households, underscoring the need for faster wage gains as the labor market recovers. Last week's drop in confidence capped the strongest quarter since the recession, indicating consumers see halting progress in the economy.

The Bloomberg gauge of Americans' views on the current state of the economy declined to 22.4 last week, the weakest since the period ended May 25, from 22.9.

The measures of personal finances dropped to 50.2, the lowest since August 3, from 51.3. A gauge of the buying climate, which shows whether this is a good time to purchase goods and services, fell to 31.9 from 32.2.

Even with the recent declines, the overall index averaged 36.7 in the third quarter, the best since the end of 2007.

Sentiment among those earning less than $50,000 a year dropped last week to the lowest level since the period ended May 25. Among those earning more than $100,000 a year, confidence improved as the gap between the two income groups reached its widest point since early November.

Today's report also showed employment opportunities may be waning. Sentiment among the jobless dropped last week to 28.7, the lowest since August 3.

Sentiment among those Americans paying rent dropped to the lowest level since early November 2013, resulting in the largest confidence gap between renters and homeowners in five years. The difference may reflect higher rents and helps explain why homebuilders are more upbeat about the industry.