Americans’ view on U.S. economy drops to one-year low

The gap between Americans with a positive and negative outlook widened amid an uneven housing market

Topics: Bloomberg, economic crisis, Housing Market, Housing bubble, housing crisis, , , , , , ,

Americans’ view on U.S. economy drops to one-year low (Credit: AP/Mike Groll)

Sept. 19 (Bloomberg) — Consumers views of the U.S. economic outlook deteriorated in September to the weakest level in a year as higher borrowing rates started to chip away at progress in the housing market.

The gap between positive and negative expectations widened to minus 9, the lowest since August 2012, from minus 5 in the prior two months, according to results of the Bloomberg Consumer Comfort Index. The weekly confidence measure rose to a one-month high of minus 29.4 from minus 32.1.

The recent cooling in the labor and housing markets points to an uneven recovery, helping explain why the Federal Reserve decided yesterday to maintain the pace of monetary stimulus. Faster job and wage growth would help ease the strain of costlier credit that’s discouraging some households from spending, which accounts for 70 percent of the economy.

“The decline in overall confidence is the result of a slowdown in the economy,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “This reflects rising rates and a deceleration in sensitive sectors like residential investment and home purchases.”

Another report today from the Labor Department in Washington showed fewer Americans than forecast applied for unemployment benefits last week as two states began working through a backlog of applications caused by computer-system changeovers. Jobless claims rose by 15,000 to 315,000 in the week ended Sept. 14. Economists projected an increase to 330,000.

Stocks rose, sending the Standard & Poor’s 500 Index to another record, after the Fed’s decision yesterday. The S&P 500 climbed 0.2 percent to 1,729.55 at 9:35 a.m. in New York.


The monthly expectations figures showed 25 percent of those surveyed said the economy was getting better, down from 28 percent in August and the smallest share in 13 months.

The weekly gauge has climbed the past two periods after tumbling almost 9 points in the month ended Sept. 1. Its recent improvement suggests the outlook may not erode much more. All three components of the weekly Bloomberg comfort index advanced.

The measure tracking Americans’ views of their personal finances rose to 1.6 last week, the first positive reading in a month, from minus 1.9. A gauge of the buying climate increased to minus 36.3 from minus 38.9. An index of current views on the economy went up to minus 53.5 from minus 55.5 the week prior.

Just as households became more pessimistic this month about the strength of the recovery, corporate officers this quarter also grew less upbeat. A survey yesterday showed fewer chief executive officers project a pickup in sales and capital spending in the next six months as the budget debate in Washington puts hiring plans on hold.




The Business Roundtable’s economic outlook index dropped to 79.1 in the third quarter from a one-year high of 84.3 in the previous three months, the Washington-based trade group said. Measures greater than 50 are consistent with economic expansion.

Rodney McMullen, president and chief operating officer at Kroger Co., a Cincinnati-based owner of supermarkets, said on a Sept. 15 earnings call that the economy is “fragile.”

“For the last several years, consumer confidence continues to improve but at a slow and steady pace,” he said.

The Fed said yesterday it would maintain its $85 billion a month in bond purchases. The nation’s central bankers said they need to see more signs of lasting improvement in the economy.

“Conditions in the job market today are still far from what all of us would like to see,” Chairman Ben S. Bernanke said at a press conference after the two-day meeting of the Federal Open Market Committee. “The committee has concern that rapid tightening of financial conditions in recent months would have the effect of slowing growth.”




Higher rates have started to take a toll on the housing market, which has been a source of strength for the expansion. Starts of new homes rose 0.9 percent in August to an 891,000 annualized rate, the Commerce Department said yesterday. The pace remains short of the 1 million annual rate reached in March, an almost five-year high. Building permits, a proxy for future projects, decreased more than forecast.

At the same time, auto sales remain a bright spot of the expansion, possibly reflecting interest-free financing offered by some carmakers. August sales at General Motors Co., Ford Motor CO., Toyota Motor Corp. and Honda Motor Co. all surpassed the most recent analyst estimates.

Motor vehicle purchases climbed 0.9 percent last month after a 0.5 percent gain in July, according to the Commerce Department’s retail sales report. Retail purchases minus auto dealerships rose 0.1 percent, the smallest gain in four months. Five of 13 major categories, including clothing and building materials, showed declines in demand.




Today’s confidence data showed that most demographic groups said the economy is getting worse. The exceptions were men, 18- to 34-year-olds, Democrats and those with incomes exceeding $50,000 a year.

Seniors, or those older than 65, were the most confident age group last week, with a reading of minus 19.8, the highest in almost six years. The data also showed Americans in the South were the least pessimistic since December 2007.

The Bloomberg Consumer Comfort Index, compiled by Langer Research Associates in New York, conducts telephone surveys with a random sample of 1,000 consumers ages 18 and older.

Each week, 250 respondents are asked for their views on the U.S. economy, personal finances and buying climate. The margin of error for the headline figure is 3 percentage points. The percentage of negative responses is subtracted from the share of positive views and divided by three. The most recent reading is based on the average of responses over the previous four weeks.

The comfort index can range from 100, indicating every participant in the survey had a positive response to all three components, to minus 100, signaling all views were negative.

–Editors: Vince Golle, Carlos Torr

To contact the reporter on this story: Ben Schenkel in Washington at

To contact the editor responsible for this story: Christopher Wellisz at

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 22
  • Close
  • Fullscreen
  • Thumbnails

    Once upon a time on the Bowery

    Talking Heads, 1977
    This was their first weekend as a foursome at CBGB’s, after adding Jerry Harrison, before they started recording the LP “Talking Heads: 77.”

    Once upon a time on the Bowery

    Patti Smith, Bowery 1976
    Patti lit up by the Bowery streetlights. I tapped her on the shoulder, asked if I could do a picture, took two shots and everyone went back to what they were doing. 1/4 second at f/5.6 no tripod.

    Once upon a time on the Bowery

    Blondie, 1977
    This was taken at the Punk Magazine Benefit show. According to Chris Stein (seated, on slide guitar), they were playing “Little Red Rooster.”

    Once upon a time on the Bowery

    No Wave Punks, Bowery Summer 1978
    They were sitting just like this when I walked out of CBGB's. Me: “Don’t move” They didn’t. L to R: Harold Paris, Kristian Hoffman, Diego Cortez, Anya Phillips, Lydia Lunch, James Chance, Jim Sclavunos, Bradley Field, Liz Seidman.

    Once upon a time on the Bowery

    Richard Hell + Bob Quine, 1978
    Richard Hell and the Voidoids, playing CBGB's in 1978, with Richard’s peerless guitar player Robert Quine. Sorely missed, Quine died in 2004.

    Once upon a time on the Bowery

    Bathroom, 1977
    This photograph of mine was used to create the “replica” CBGB's bathroom in the Punk Couture show last summer at the Metropolitan Museum of Art. So I got into the Met with a bathroom photo.

    Once upon a time on the Bowery

    Stiv Bators + Divine, 1978
    Stiv Bators, Divine and the Dead Boys at the Blitz Benefit show for injured Dead Boys drummer Johnny Blitz.

    Once upon a time on the Bowery

    Ramones, 1977
    “The kids are all hopped up and ready to go…” View from the unique "side stage" at CBGB's that you had to walk past to get to the basement bathrooms.

    Once upon a time on the Bowery

    Klaus Nomi, Christopher Parker, Jim Jarmusch – Bowery 1978
    Jarmusch was still in film school, Parker was starring in Jim’s first film "Permanent Vacation" and Klaus just appeared out of nowhere.

    Once upon a time on the Bowery

    Hilly Kristal, Bowery 1977
    When I used to show people this picture of owner Hilly Kristal, they would ask me “Why did you photograph that guy? He’s not a punk!” Now they know why. None of these pictures would have existed without Hilly Kristal.

    Once upon a time on the Bowery

    Dictators, Bowery 1976
    Handsome Dick Manitoba of the Dictators with his girlfriend Jody. I took this shot as a thank you for him returning the wallet I’d lost the night before at CBGB's. He doesn’t like that I tell people he returned it with everything in it.

    Once upon a time on the Bowery

    Alex Chilton, Bowery 1977
    We were on the median strip on the Bowery shooting what became a 45 single sleeve for Alex’s “Bangkok.” A drop of rain landed on the camera lens by accident. Definitely a lucky night!

    Once upon a time on the Bowery

    Bowery view, 1977
    The view from across the Bowery in the summer of 1977.

    Once upon a time on the Bowery

    Ramones, 1977 – never before printed
    I loved shooting The Ramones. They would play two sets a night, four nights a week at CBGB's, and I’d be there for all of them. This shot is notable for Johnny playing a Strat, rather than his usual Mosrite. Maybe he’d just broken a string. Love that hair.

    Once upon a time on the Bowery

    Richard Hell, Bowery 1977 – never before printed
    Richard exiting CBGB's with his guitar at 4am, about to step into a Bowery rainstorm. I’ve always printed the shots of him in the rain, but this one is a real standout to me now.

    Once upon a time on the Bowery

    Patti Smith + Ronnie Spector, 1979
    May 24th – Bob Dylan Birthday show – Patti “invited” everyone at that night’s Palladium show on 14th Street down to CBGB's to celebrate Bob Dylan’s birthday. Here, Patti and Ronnie are doing “Be My Baby.”

    Once upon a time on the Bowery

    Legs McNeil, 1977
    Legs, ready for his close-up, near the front door of CBGB's.

    Once upon a time on the Bowery

    Suicide, 1977
    Rev and Alan Vega – I thought Alan was going to hit me with that chain. This was the Punk Magazine Benefit show.

    Once upon a time on the Bowery

    Ian Hunter and Fans, outside bathroom
    I always think of “All the Young Dudes” when I look at this shot. These fans had caught Ian Hunter in the CBGB's basement outside the bathrooms, and I just stepped in to record the moment.

    Once upon a time on the Bowery

    Tommy Ramone, 1977
    Only at CBGB's could I have gotten this shot of Tommy Ramone seen through Johnny Ramones legs.

    Once upon a time on the Bowery

    Bowery 4am, 1977
    End of the night garbage run. Time to go home.

  • Recent Slide Shows


Loading Comments...