WASHINGTON – Consumer confidence (search) dropped to its lowest levels since midsummer amid worries about high energy prices, uncertainty about the labor market and anxiety about making major purchases like a car or a home.
The AP-Ipsos consumer confidence index slipped to 97.4 in September from 103.4 in August, the latest measure of consumer attitudes in recent weeks to reflect uneasiness over the economy. The consumer confidence index is benchmarked to a 100 reading on January 2002, the month the index was started by Ipsos.
"I think consumers have some caution," said Richard Yamarone, economist at Argus Research Corp (search). "It relates back to the slowing economy and the questionable job outlook and higher-priced energy as we head into the winter season."
Consumers cut back on their borrowing in August by the largest amount since the end of 1990. In recent weeks, mortgage rates have crept up.
With crude oil prices setting record highs, the Energy Department (search) warned U.S. homeowners this week that they should expect their heating bills to rise this winter due to double-digit price increases for heating oil and natural gas. Gasoline is averaging $1.94 a gallon nationwide, 36.5 cents higher than a year ago.
"I work in Detroit, because of all the problems with the auto industry, the economy's going to heck, or at least it appears that way," said Rick Seifert, a dental technician who lives in Toledo, Ohio. "For a lot of assistants in our office, their husbands are losing their jobs, getting laid off."
The drop in the index was led by anxiety about making major purchases, job security and the ability to invest in the future.
"The election itself may be undermining economic confidence a bit," said Mark Zandi of Economy.com. "There's been a lot of back and forth on the health of the economy from candidates with two very loud megaphones."
Some Americans acknowledge their feelings about the economy are affected by presidential politics. Republicans were twice as likely as Democrats to say they expect the economy to get stronger in the next six months.
Michelle Wise, a 32-year-old administrative worker from Claremore, Okla., said she's confident about the economy because of the Bush administration's "consistency and attempts to make tax cuts permanent. And we're safer."
The number of people who feel more confident about job security for themselves and for people they know dropped from 48 percent to 40 percent in September. And the number who said they were more confident of their ability to invest in the future dropped from 51 percent to 42 percent.
Sandra Rosato, a 43-year-old homemaker from New York City, says her own confidence in the economy has dropped because of President Bush.
"The economy's getting worse. The price of everything's going up," she said. "The president keeps taking from the poor and giving to the rich."
The AP-Ipsos consumer confidence index is based on a poll of 1,000 adults taken Oct. 4-6, with a margin of sampling error of plus or minus 3 percentage points.