The recession might technically be over, but the latest consumer confidence numbers suggest consumer confidence is still in recession mode.
Patrick O’Keefe, director of economic research at J.H. Cohn, in Roseland, said he’s not surprised to see the numbers drop, given the weak labor market, household income that hasn’t kept up with expenses and continued weakness in the housing sector.
“I think as long as the overall performance of the economy remains sluggish, with growth still meager, that people generally will respond pessimistically,” he said, “because we’re now more than two years into a supposed recovery, and little headway has been made in job creation or income production in ways that benefit households.”
The latest numbers come from the Conference Board, whose consumer confidence index dipped to 44.5 in August, down from 59.2 in July. Those numbers were the lowest since April 2009, two months before the recession ended, according to the National Board of Economic Research.
The Conference Board survey also found consumers’ view of their present situation and their expectations for the near future had also dimmed from July.
The sharpest decline was in the board’s Expectations Index, which fell from 74.9 last month to 51.9 this month. Only 11.8 percent of respondents to the board’s survey said they expect business conditions to improve in the next six months, down from 17.9 percent.
Those expecting business conditions to worsen in the next six months jumped from 16.1 percent to 24.6 percent between July and August.
Those figures were based on national polling, but O’Keefe said he doubts New Jersey-specific numbers would vary significantly.
“Our recovery is a little bit slower than the national recovery, but it’s not so pronounced that we would expect … New Jersey to feel more ill at ease than the nation on average,” he said.
The report was Conference Board consumer confidence report since a long-debated deal was reached to raise the nation’s debt ceiling. O’Keefe said the Beltway bickering was “anything but beneficial,” but he said it would be wrong to blame the drop in consumer confidence on that debate.
“I think it was what people — not just people who are very close to the process, but people generally — have come to expect from Washington, which is gridlock and pettifoggery, and not much by way of progress,” O’Keefe said.
Asked if the resolution — at least temporarily — of the debt ceiling crisis might portend a rebound in consumer confidence next month, O’Keefe said he didn’t think so.
“Let’s say for example that it were the debt ceiling debacle that caused people to turn suddenly negative — there was nothing in the resolution that would cause it to turn positive,” he said.