It was just last summer that the Dow Jones industrial average shed 2,000 points in three terrifying weeks. Investors had a host of things to worry about, including the possibility of another recession.NEW YORK – Americans’ confidence in the economy improved slightly in August from July, but people are still roughly as gloomy as a year ago.
The downbeat sentiment underscores the challenges ahead for the increasingly shaky recovery and for retailers, which are grappling with a weak start to back-to-school shopping. Worries are even growing about the critical holiday shopping season.
The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index rose to 53.5 from a revised 51.0 in July. Economists surveyed by Thomson Reuters had expected 50.5. The increase comes after two straight months of declines.
“The consumer is still struggling, and the prospects look like more of the same,” said Ken Perkins, president of research firm RetailMetrics.
An index of 90 or more indicates a healthy economy. That level hasn’t been approached since the recession began in December 2007. The index – which measures how Americans feel about business conditions, the job market and the next six months – had been recovering fitfully since hitting an all-time low of 25.3 in February 2009.
In August 2009, the index stood at 54.5, only a point higher than now. Since then, it has mostly hovered in a tight range between the mid-40s and the high 50s. May 2010 proved to be the only exception, at 62.7 – still weak.
Moreover, there doesn’t seem to be any catalyst in sight to get consumers to feel better soon. Home sales are plunging, and consumers are saving more and spending less as the unemployment rate remains stuck at almost 10 percent.
Shoppers are increasingly waiting for the best deals. Perkins estimates that August retail sales were at best slightly better than last year, which was weak. Major retailers report August revenue figures Thursday.
