Although earlier this month economists declared the recession officially over in June 2009, Americans appear to disagree. Consumer confidence dipped in September to below the level it was at that time, according to the Conference Board. Since weak spending is one of the chief reasons for the economy being so slow, this is pretty awful news.
Here's the chart, since June 2009:
The index's 4.7 point drop for September is significant. It's the biggest plunge since June's 8.4 point drop. This month's value of 48.5 is also the lowest since February, and the third worst in the 16 months shown.
As you can also see from the chart, when the recession "ended" according to economists, in June 2009, the index value stood at 49.3. That's higher than September's value of 48.5. The recession has been over for more than a year, but consumers feel even worse about the economy now than they did then.
This month's decline is particularly disappointing not only because of its magnitude, but also because it erases the optimism suggested from the slight rise in sentiment in August. It's not entirely clear what went wrong in September, but something made consumers feel worse about the economy. Maybe it was unemployment ticking up 0.1% to 9.6% in August.Or perhaps it was the government's lack of action that they feel will make a difference. There are plenty of theories available for why Americans aren't pleased with the economy right now.
The Conference Board's other indices also declined in September. Its Present Situation Index fell to 23.1 from 24.9, after also falling in August. Its Expectations Index, however, rose in August, but it decreased in September drastically to 65.4 from 72.0.
Unfortunately, less confident consumers will likely spend even less. That will probably ensure that the recovery remains slow. The big fear here would be that consumer wariness continues to feed on itself, with anemic spending keeping the economy weak and providing Americans with a grimmer and grimmer view of the future. As consumers feel worse about the economy, the chances of a double dip grow.